We carried out a policy consultation on the core rate framework policies from August 14, 2017 to January 15, 2018. We would like to thank everyone who participated in the policy consultation (you can view all of the submissions here, and read the consultation summary). The feedback we received was very valuable and has informed our revised, approved policies.
What is changing?
In November 2016, following a multi-year initiative and extensive stakeholder consultations, our Board of Directors approved the rate framework and the amended Regulation (O. Reg. 175/98) under the Workplace Safety and Insurance Act, 1997. The amended regulation has since been approved by the Ontario government.
The rate framework changes how businesses are classified and how their premium rates are set. To support the new premium rate setting model, we are publishing six revised and new policies.
As of January 1, 2020, the rate framework policies will replace our current suite of policies concerning classification, rate setting and retroactive experience rating. The policy revisions and deletions are outlined below:
The rate framework policies are being published well in advance of implementation to provide businesses with an understanding of how they will be classified and how their rates will be set under the new premium rate setting model. We committed to providing at least one year’s notice to all businesses on the content of the policies, to ensure you’re well prepared for the coming changes, and this advance posting upholds that commitment. The policies will come into effect in time for implementation of the new model on January 1, 2020.
What can we expect moving forward?
We will continue further policy development in support of the rate framework, and we expect to issue further policy changes (minor and housekeeping) to align with the core policies and to ensure a smooth transition for all businesses.
We are committed to extensive engagement and education for businesses as we transition to the new premium rate setting model in 2020. Later this year, we will be sending every business registered with the WSIB a letter about premium rates under the rate framework.
You can also visit our rate framework webpage for news, updates and useful resources to learn more about the new model.
Rate framework policy overview
12-01-04, Coverage Status
The Coverage Status policy outlines the ability of businesses in either Schedule 2 industries or industries described in Schedule 1, Part II to apply for mandatory coverage under Schedule 1. This policy has been revised to be simpler and easier to understand, and is aligned with the revised Schedule 1 of Ontario Regulation 175/98, which was recently changed to reflect the new classification structure.
The detailed guidelines for applying for Schedule 1 coverage, including the conditions for cancelling Schedule 1 by-application coverage, will remain in Policy 12-01-02, Employer by Application.
14-01-01, The Classification Structure
The revised Classification Structure policy is simpler, easier to understand and supports our new classification structure under the rate framework. The new classification structure will consist of 34 classes and subclasses that are adapted from the North American Industry Classification System (NAICS).
The policy defines the key concepts, such as business activity, classification, and classification change. As is the case today, we will not separately classify support operations that are not business activities in their own right. Also, specific classification rules apply to businesses with multiple business activities that maintain segregated payrolls versus a business that does not.
14-01-07, Single and Multiple Premium Rates
The Single and Multiple Premium Rates policy introduces new rules for how we determine whether businesses with more than one business activity are assigned a single premium rate, based on predominant class, or are eligible for multiple premium rates.
In order to be assigned a separate premium rate for a business activity, in a 6-digit NAICS code, your business activity must be significant and must not be considered integrated with the business’ other operations. This is intended to maximize the benefits of the employer level premium rate setting approach under the rate framework.
14-01-06, Associated Employers
The Associated Employers policy replaces existing policy and now allows us to combine the claims experience and insurable earnings of two or more businesses to set premium rates. To support this expanded policy direction, the changes include a new two-part “test” to determine whether two or more businesses are associated. The test of affiliation focuses on the structure of your business. The test of cooperation focuses on what your business does and how it works with other affiliated businesses.
14-01-02, Premium Rate Setting
The Employer Level Premium Rate Setting is a new policy that outlines our two-step model to set premium rates for Schedule 1 businesses for the upcoming year. Step 1 involves setting a class average premium rate based on each class’ share of responsibility for the costs generated to maintain the insurance fund. Step 2 involves setting a risk adjusted premium rate for each business based, in part, on how their risk and claims experience compares with the collective experience of their class.
14-02-06, Employer Premium Adjustments
The Employer Premium Adjustments policy outlines the circumstances under which we will adjust the premiums billed, payable, or previously paid by employers. Most adjustments will be limited to January 1st of the third prior year, with some exceptions.
A major feature of this policy includes the collapsing (or in some cases, expanding) of certain windows for adjustments to premiums already paid, or premiums billed/owed by businesses. Our new adjustment approach covers three separate policies, and amalgamates them all into one, comprehensive policy.
Rate framework policy consultation submissions