Clarification regarding premium rate increase for 2011 and 2012
We wish to clarify some information that has been in the media about our recent premium rate increase announcement.
- Large percentage increases in premium rates will result in job losses and businesses closing
It is true that we’ve made the difficult decision to raise the average premium rate for the next two years. This is necessary since the Insurance Fund at the WSIB has experienced a deficit averaging $1 billion over the past five years and will again experience a substantial deficit this fiscal year. In light of this situation, the WSIB enacted an average two percent increase in premiums which is the absolute minimum which could have been responsibly considered in the circumstances and needed to be implemented immediately.
While premium increases to some groups do appear high in percentage terms, it is important to keep in mind that the increases are only applied to every $100 in payroll. For example, for rate group 214 (Fruit and Vegetable Products), while the percentage increase in the premium rate is 19 per cent, the increase in premium is 41 cents, or less half of one percent on total payroll.
Another example is clothing stores which are classified under rate group 641. They will see a 15.9% increase in premium rates per $100 of payroll. Translated into actual cost this represents an increase of 21 cents for every $100 of payroll ? less than one quarter of one percent of insurance payroll costs.
So, while it may seem that some industry rate groups are receiving fairly large percentage increases in their premium rates, the actual impact on an individual employer’s costs will be modest.
We invite stakeholders to actively participate in the Funding Review so that we can put the Insurance Fund on a sound financial footing going forward. Our goal, of course, is to protect injured workers while reducing premiums as quickly as can be done.
For information on how to participate, please visit http://www.wsibfundingreview.ca/