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Business group seeks changes in Ontario workers comp program overhaul

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The Ontario Chamber of Commerce supports part of a proposed revamp of the province's workers compensation system, but also said more work needs to be done to sufficiently improve the program.

If adopted, the Ontario Rate Framework Reform would transition the workers comp system to setting rates prospectively rather than retrospectively, according to Ontario's Workplace Safety and Insurance Board.

Under the current system, the employer pays the basic industry assessment rate at the start of the year, with retrospective refunds or surcharges after the year is done to reflect actual experience. A prospective system would adjust future premiums based on experience.

The current system is problematic because an employer's cash flow is affected for 20 months — the time it takes for the board to issue surcharges and rebates — and employers are not paid interest on rebates, according to comments submitted last week by the Ontario chamber, which supports a prospective system.

However, the chamber expressed concern that employers with good safety records would end up subsidizing employers with high claims. Ontario regulators should implement a system similar to the Alberta Poor Performance Surcharge, which is applied to employers with claims records that are at least 80% worse than their class average, the chamber recommended.

“We feel strongly that employers with dedicated and effective occupational health and safety programs should not subsidize employers who fail to do the same,” the chamber said.

The chamber also generally supports revamping the province's “outdated” classification system, which would narrow the current 155 rate groups to 20 to 25 classifications, but said fewer classifications risks grouping employers with very different risk profiles. For example, electricians and demolition workers were proposed for the same class even though electricians have much lower risk profiles, the chamber said in this and other recommendations (see chart).


The chamber's stance

Other recommendations made by the Ontario Chamber of Commerce on the Canadian province's proposed revamp of its workers comp system include:

• A public, detailed board analysis of how proposed rate framework changes would affect employers;

• Continue allowing businesses to pay different rates based on their activities in different business areas;

• Implement a three year-experience rating period rather than the proposed six years;

• Have the auditor general oversee the board and help reduce the comp program's unfunded liability of 8.3 billion Canadian dollars ($6.25 billion); and

• Eliminate the fatal claims adjustment policy, which disallows a premium rebate in the same year an employer has a workplace fatality.


The proposed framework also would eliminate the Second Injury and Enhancement Fund, which allows all or part of an injured worker's compensation and health costs to be transferred from the employer to the fund if the worker had a prior disability or pre-existing condition.

Eliminating the fund would reduce re-employment opportunities for injured workers, the chamber said in asking the board to reconsider.

The fund has “morphed away from its intent to support the employment of previously injured workers and more toward a cost relief program that causes distortions among employers within their rate group,” a board spokeswoman said in an email. However, the board is “fully open to consider” calls to maintain the fund since most employers have expressed the need for cost relief, the spokeswoman said.

The deadline to submit comments on the plan is Oct. 2, with the changes being implemented no sooner than 2018.