07/22/2013
WSIB Premiums to Remain Unchanged
The province’s construction industry is cautiously optimistic about the financial state of Ontario’s Workplace Safety and Insurance Board (WSIB) after it announced premium rates will be maintained at current levels for all employers for 2014.
“It is definitely a recognition that this unfunded liability and the long-term financial viability of the board is not going to be shouldered solely by employers through increased premiums,” said Jason Ottey, chair of the Construction Employers Coalition (CEC), which is part of the Construction Industry Advisory Council that meets quarterly with the WSIB.
Results from the first quarter of 2013 indicate that the system is progressing well towards meeting its financial targets, including meeting funding requirements set under government regulation last year, says the board.
Ninety-two per cent of all injured workers with lost time injuries were back to work with no wage loss within 12 months of their injury and the length of time on claim and the number of workers requiring 100 per cent wage loss support has dropped significantly
“They’re doing superb work, they’re modernizing the organization and they’re getting people back to work faster...they appear to be on the right track,” said Council of Ontario Construction Associations (COCA) president Ian Cunningham.
“We’ve had one year and one quarter of good experience and it’s terrific, but it’s one year in a 15-year journey. It took a long time to dig a $14 billion hole and it’s going to take us a long time to get out of it.”
From March 2012 to March 2013, the WSIB’s unfunded liability decreased by $702 million to $13.359 billion, according to the first quarter report to stakeholders.
Following the release of the Arthurs review last year, the government issued requirements that the board be 60 per cent funded by 2017, 80 per cent funded in 2022 and a full 100 per cent funded by 2027.
“There’s a recognition that those are their funding timelines,” said Ottey. “The zero per cent was not achieved by some political maneuvering. It was achieved really through the board assessing its financial capabilities and determining that for 2014, no additional premium increases were necessary.”
The WSIB has reduced annual benefit costs paid from $3.2 billion in 2009 to $2.7 billion by the end of 2012, resulting in a cost saving of more than $500 million a year.
Employer premiums fully covered the WSIB’s operating costs in 2012, allowing approximately $1.3 billion of investment earning to be applied against the unfunded liability.
The last two premium rate increases have been across the board increases.
“There are employers who have earned a decrease. This zero, while better than an increase is still not a decrease. We are supportive of that proposition, as long as the board continues to recognize the new era of fiscal responsibility,” said Ottey.
The board says its administration expenses continue to be tightly controlled, with improved efficiency and modernization. Faster decision making has resulted in 92 per cent of eligibility decisions now being made within two weeks of the claim being received and more than half of these are made within 24 hours.
Use of the board’s eService offerings has also taken off with 94 per cent of clearance certificates issued online in 2012, the use of ePremiums increased to 47 per cent and the use of eRegistration increased to 66 per cent.
In the first two years of the Work Transition program for workers unable to return to their pre-injury employers, 69 per cent of injured workers obtained employment after completing their programs, an increase from 36 per cent success under the old, outsourced Labour Market Re-entry model.
The board reported that quicker referrals to high-quality health care providers resulted in fewer workers experience permanent impairments, down from 12.7 per cent in 2009 and 8.9 per cent in 2012.
In order to achieve full funding Cunningham said that full indexation of partial disability benefits must not be implemented, at least until the system is fully funded.
Ottey said the question is whether the system can handle full indexation.
“We generally accept that pension benefits should be indexed so there’s no erosion of purchasing power by pensioners,” he said.
“When the system is at 80 per cent, that’s when it’s appropriate to have the discussion about indexation...Right now they’re in the mid-fiftieth percentile. So it’s indexation but not now, not until the system can support it.”
CEC and COCA would like to see the 72-month lock-in provision repealed.
Ottey pointed to the study by the Institute of Work and Health that looked at the adequacy of workers’ compensation benefits.
“That study found that injured workers are actually over compensated,” he said. “That study in our opinion just further augmented our proposition that the 72-month lock-in needs to be repealed.”
Cunningham would also like to see oversight of the WSIB transferred from the Ministry of Labour to the Ministry of Finance.
