Our new model will make it easier to understand how your business and other businesses are classified. It will also better reflect your individual claims experience and help businesses plan for the future by providing projected rate information.
What’s changing in the new model?
First, we will streamline how businesses are classified.
By using the North American Industry Classification System (NAICS), which is already used by the Canada Revenue Agency and Statistics Canada, it will be easier for you to understand your classification. Using NAICS will allow us to move 155 different rate groups to 34 classes/subclasses.
Second, we will make your premium rate easier to understand.
We will set an average premium rate for each class based on its risk profile and share of responsibility to maintain the insurance fund.
Each NAICS class will then be broken down into a series of risk bands, and each risk band will have an associated premium rate. The difference between each risk band will be approximately five per cent.
Next, we will look at your specific claims history to create a risk profile that compares your risk to the rest of the businesses in your class.
Businesses in the same class, with similar risk profiles will then be assigned to the same risk band and premium rate that reflects their individual risk profile.
Third, we will help you plan for any changes in your premium rate.
Businesses will no longer have to wait for rebates or surcharges. The current retrospective approach to rate-setting, including MAP, NEER and CAD7 experience rating programs will be eliminated.
Our new model will introduce projected rates, providing your business with the future direction of your rates, up or down. This change will help you better prepare for the future.
For experience-rated businesses
Since we’re transforming how we set premium rates for businesses, our new model will replace all of our existing experience rating programs. In 2020, you will receive your final NEER and CAD7 statements, as well as your final adjustments under these programs, which will include an assessment of the 2019 year. Businesses registered under the MAP program received their final statement in 2018, and will receive any final adjustments in 2019.
Moving to the new model
To help you smoothly transition into our new model, any rate increases will be staggered over time, while rate decreases will be applied immediately.
Here’s how the transition to our new model will work:
- In 2020, businesses will be assigned a risk band and receive a premium rate based on your previous rates, claims experience, size of business, NAICS classification and whether or not you were in an experience rating program previously. Businesses with projected premium rate decreases will move down to their projected risk band.
- In 2021, businesses with projected premium rate increases will move up a maximum of one risk band from their 2020 risk band. Businesses with projected premium rate decreases will move down to their projected risk band.
- In 2022, businesses that have not yet reached their projected premium rate will move up a maximum of two risk bands above their 2021 risk band. Businesses with projected decreases will move down to their projected risk band.
Health and safety programs
As we move closer to implementing our new rate-setting model, you can start making a difference now to improve your safety experience. We have a number of programs and tools to help businesses, including Compass, which allows anyone to find and compare health and safety statistics for workplaces across the province and our new Workwell app, which you can use to evaluate your health and safety management system. We also have a number of services and resources customized for small businesses, which you can learn more about by visiting our website.
We will be providing businesses with 2020 premium rates this fall. As we get closer to implementation in 2020, we will continue to engage businesses across Ontario to learn more about our new model.
Janine Dyck is vice-president, employer account services for WSIB.