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Schedule 2 Provisional Administration Rates

 

Overview

Schedule 2 employers are self-insured and the WSIB administers the payment of benefits. Each year, we announce a provisional administration rate that reflects the anticipated administration costs for the year for administering these benefits.

We're pleased to provide Schedule 2 employers with details about their 2018 provisional administration rate along with an update on the latest forecast for their 2017 administration rate below. At the end of the year, we will announce what the actual administration rate was and provide an adjustment to reflect any differences between the actual and provisional rate.

You can view the FAQ below to learn more about the 2018 provisional administration rates and latest forecast. If you have any further questions about the 2018 provisional administration rate, please call the Schedule 2 general revenue enquiry number at 416-344-3646 or toll-free at 1-800-387-0750.

Provincially regulated employers

The 2018 provisional administration rate for provincially regulated employers is 29.9 per cent of expected benefit payments. This is a $3.5 million increase in total expenses and a $48.9 million increase in benefit payments from the 2017 provisional administration rate.

Summary of the costs used to determine the 2018 provisional administration rate

Costs allocated to employers 2018 estimate ($000)

WSIB administration

49,226

Legislative obligations

2,983

Ministry of Labour - prevention & Occupational Health and Safety Act *

17,659

Other expenses collectively charged **

3,633

Total costs

73,501

Total benefits

245,971

Provisional administration rate (Costs/Benefits) x 100%

29.9%

* includes the Occupational Health & Safety Act (OHSA), Workplace Safety and Insurance Appeals Tribunal (WSIAT) costs and Ministry of Labour costs when applicable, among others.

** includes bankruptcies, net interest gain/loss, interest on delayed benefits, and benefit overpayments.

Update on 2017 administration rate

The 2017 administration rate initially set at 35.5 per cent of expected benefit payments is now anticipated to be 30.0 per cent.

Federally regulated employers

The 2018 provisional administration rate for federally regulated employers is 22.7 per cent of expected benefit payments. This is a decrease of $1.0 million in total expenses and a $1.4 million increase in benefit payments from the 2017 provisional administration rate.

Summary of the costs used to determine the 2018 provisional administration rate

Costs allocated to employers 2018 estimate ($000)

WSIB administration

5,407

Legislative obligations

328

Ministry of Labour - Prevention & Occupational Health and Safety Act *

0

Other expenses collectively charged **

399

Total costs

6,134

Total benefits

27,019

Provisional administration rate (Costs/Benefits) x 100%

22.7%

* includes the Occupational Health & Safety Act (OHSA), Workplace Safety and Insurance Appeals Tribunal (WSIAT) costs and Ministry of Labour costs when applicable, among others.

** includes, net interest gain/loss, interest on delayed benefits, and benefit overpayments.

Update on 2017 administration rate

The 2017 administration rate initially set at 27.9 per cent of expected benefit payments is now anticipated to be 22.6 per cent.

Employers covered under the Government Employees Compensation Act (GECA) administered by the Department of Employment and Social Development Canada (ESDC)

The 2018 provisional administration rate for GECA employers is 22.5 per cent of expected benefit payments. This is a decrease of $0.2 million in total expenses and a $7.9 million increase in benefit payments from the 2017 provisional administration rate.

Summary of the costs used to determine the 2018 provisional administration rate.

Costs allocated to employers 2018 estimate ($000)

WSIB administration

9,219

Legislative obligations

559

Ministry of Labour - Prevention & Occupational Health and Safety Act *

0

Other expenses collectively charged **

582

Total costs

10,360

Total benefits

46,068

Provisional administration rate(Costs/Benefits) x 100%

22.5%

* includes the Occupational Health & Safety Act (OHSA), Workplace Safety and Insurance Appeals Tribunal (WSIAT) costs and Ministry of Labour costs when applicable, among others.

** includes net interest gain/loss, interest on delayed benefits, and benefit overpayments.

Update on 2017 administration rate

The 2017 administration rate initially set at 27.6 per cent of expected benefit payments is now anticipated to be 22.4 per cent.

Technical rate sessions for schedule 2 employers

Do you want to understand how the WSIB calculates the administration rates for Schedule 2 employers? Do you want to know what is driving administration rates? In March 2018, the WSIB will be hosting Technical Rate Sessions for Schedule 2 Employers. You must sign up in advance. For more details, or to register, click here. If you have any questions please contact technicalratesessions@wsib.on.ca.

Frequently asked questions

How do you determine the provisional rate for each group?

To calculate the administration fee for Schedule 2 employers, we estimate the annual costs of running the Schedule 2 system at the beginning of each year. This is known as the provisional rate. There are two parts to the process of determining what rate we charge the Schedule 2 employers:

  1. We determine the administrative expenses for Schedule 2 as a whole
  2. We then determine the Administration Rate for each employer group

You can see a breakdown of each of these steps in the document Schedule 2 - Understanding the basics (PDF).

How do you get from the provisional rate to the actual rate?

After we provide the employers a provisional rate for the year, we wait until the actual experience is available for that year. At that point, we provide employers with their actual rate based on final data from the previous year. You can view more information on the rate setting cycle here (PDF).

Why are there higher expected benefit payments and administrative expenses for 2018 compared to what you anticipated when you set the 2017 provisional rates?

The expected 2018 benefit payments are higher than in the 2017 provisional rates to reflect changes to trends in injuries and benefit payments. There are also changes to benefits that will cost Schedule 2 employers such as the new work-related chronic mental stress legislation, which takes effect in January 2018.

With the introduction of these enhanced benefits due to new legislation, we expect there will be increases to the corresponding costs to administer benefits in the near term.  Furthermore, the WSIB has a number of projects underway to maximize outcomes and the quality of services we deliver to people injured at work and employers.  

What is the reason for the latest forecast changes since you released the 2017 Provisional Rate?

Total expenses are lower than we had forecast in the 2017 provisional rates while forecast benefit payments are higher than we anticipated. The increase in benefit payments is a result of increasing loss of earnings (LOE) payments due to return-to-work results and an increase of mild traumatic brain injuries, which tend to have longer durations compared to other claims. Additionally posttraumatic stress disorder claims related to new legislation are higher than the 2017 provisional estimate.

What happens if the actual rate for 2017 is different than the provisional rate originally released?

Depending on if our estimates are over or under the actual costs, we either charge or credit employers any difference between the provisional and actual administration rates as a one-time adjustment. This happens in August of the following year. For example, the 2017 Actual rate will be released in August 2018 and the 2018 actual rate will be released in August 2019.

Where can I learn more?

In March 2018, the WSIB will be hosting Technical Rate Sessions for Schedule 2 employers. You must sign up in advance. For more details, or to register, click here .

Key terms

Actual Administration Rate: The Actual Administration Rate is determined after the year ends, once the financial statement audit process is completed. An adjustment may be made to reflect differences between the Provisional Administration Rate that was billed to employers and the Actual Administration Rate.

Administration Expenses: Schedule 2’s share of the WSIB’s administrative expenses is based on the latest budget for the administration of Schedule 2 claims.

Benefit Payments: Schedule 2 employers are self-insured and are therefore liable to fund all benefit payments for their injured workers and the associated administrative costs.

Collectively Charged Expenses: There are collective expense items applicable to all Schedule 2 employers such as interest on delayed payments, benefit overpayments and more.

Latest Forecast: A latest forecast of the Administration Rates is communicated along with the next year’s Provisional Administration Rates based on updated information.

Legislative Obligations: The WSIB includes legislative obligations when determining Schedule 2 rates.

This includes the Occupational Health and Safety Act (OHSA), Workplace Safety and Insurance Appeals Tribunal (WSIAT) costs and Ministry of Labour costs when applicable, among others.

Provisional Administration Rate: A Provisional Administration Rate for a year is determined before the start of the year. This rate is charged to Schedule 2 employers based on their benefits paid on a monthly basis throughout the year.

Schedule 2 Administration Rate: The Schedule 2 Administration Rate is determined for the purpose of collecting the appropriate portion of administration expenses and collective items attributed to Schedule 2 employers.

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