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WorkSafeBC: 2018 Update

By Kristine St-Laurent and Jock Finlayson

We'll start 2018 off with some good news for the province’s business community:  WorkSafeBC (WSBC) has set its assessment rates for 2018, and the news is generally positive for employers in BC.

For the second consecutive year, average base rates have been lowered. In 2017, the average base rate dipped from 1.70% to 1.65% of assessed payroll; this year, average base rates are decreasing again, from 1.65% to 1.55% (see the middle line in Figure 1).

FIGURE 1:  WSBC PREMIUM RATES AND COSTS, 2000-2018 [1]

 

          Source:  Employers Forum 2018 Rate Comparison.

 

The Good

Data collected and reported by WSBC point to fewer workplace injuries, improvements in injury prevention, and a fall in the number of claims over the last five years (Table 1). The injury rate dropped by 6% between 2012 and 2016, while the total number of claims decreased by 3%.  The agency’s large investment portfolio, its track record of solid investment returns and its sound financial management have played a significant role in keeping a lid on the average assessment rates paid by employers– especially when comparing WSBC to other provincial workers’ compensation schemes (see Figure 2).

 TABLE 1:  KEY INDICATORS, 2012-2016

Key Indicators 2012 2013 2014 2015 2016
Injury rate[2] 2.34 2.30  2.27  2.22  2.21
Return-to-work by 26 weeks[3]  79.9%  81.0%  81.5%  82.6% 82.7%
Average base premium rate        $1.54  $1.63  $1.70  $1.70  $1.70
Number of claims registered 144,807  144,816  146,814  145,523  149,554

                    Source:  WorksafeBC Annual Reports 2012-2016.

 

FIGURE 2:  HOW BC FARES AMONG PROVINCIAL WCBs: 
ADMINISTRATION COSTS PER $100 of ASSESSABLE PAYROLL, 2015

          Source:  2016 WSBC Annual Report.

 

The Not-So-Good

On the other hand, long-term disability costs and health-related costs for injured workers have been climbing (Table 2). Of concern, the share of psychological injury claims under “vocational rehabilitation” and resulting claims costs continue to rise.  While mental health still represents a small subset of claims[4] – just 1% of all claims accepted in 2016—claims based on psychological injuries/maladies have grown significantly over the past five years, and are up 20% over 2015 levels.  In addition, an increasing share of claims (21% in 2016) involve older workers (age 55 and over).  Looking ahead, these two factors combined with the rising costs of health care are likely to nudge average premium rates higher.  Potential changes to WorkSafeBC’s policies, and/or to provincial occupational health and safety legislation, may also affect future costs and therefore the premiums facing BC employers.

TABLE 2:  DISTRIBUTION OF COSTS BY TYPE OF CLAIM, 2012-2016 ($ THOUSANDS)

Cost History 2012 2013 2014 2015 2016
Short term disability $324,638 $296,565 $275,328  $266,654  $266,565
Long term disability $547,588 $655,089 $638,176  $540,059 $562,901
Survivor benefits        $73,955 $72,169 $97,525  $70,119 $70,444
Health care $535,286 $501,006  $375,569 $334,734  $315,729
Vocational rehabilitation $134,887 $151,146 $133,153 $110,488 $91,924
Claim administration $303,555 $262,580 $250,236 $226,901 $282,057
Total claims costs $2,248,730 $1,938,555 $1,769,987 $1,548,955 $1,589,620

          Source:  WorksafeBC Annual Reports 2012-2016.

 

2018 Rate Changes by Industry

While WSBC’s average base rate dropped for the second year in a row, the picture varies across industry sectors.  In 2018, 63% of employers will see lower rates while 26% will experience rate increases. The remaining 11% will see little or no change to their rates. For more details on rate premiums by industry, see here.

 

Changes Ahead

Changes to WorkSafeBC’s Board of Directors were announced on December 1, 2017, effective immediately. Of note, the government has given the WSBC Board a mandate to deliver “a new vision for British Columbia’s workers’ compensation system”, in keeping with the NDP’s 2017 election platform; but no details have been released.  The arrival of a new government in Victoria may herald a shift in occupational health and safety policies and regulations that will have an impact on future employer premiums as well as on regulatory compliance costs.  On behalf of the employer community, the Business Council intends to devote additional resources to research and advocacy on WorkSafeBC issues in 2018-19.  We will also maintain our involvement in the Employers’ Forum.

 

For a more in-depth analysis of WorkSafeBC, please see our latest Human Capital Law and Policy Publication



[1] Base Rate: Base premium rate charged to employers;  Administration Cost Rate: The marginal cost of funds (MCF) to collect and administer employer premiums;  Total Cost Rate: The total cost of administration, operations and other overhead costs of maintaining WSBC. 

[2] Injury rate:  The number of time-loss claims per 100 people working all year, whether on a part-time or full-time basis.

[3] This indicator, the percentage of workers returning to work by 26 weeks, measures the success of early intervention initiatives — designed to assist workers in returning to employment after a workplace incident or injury.  This measure is for short-term disability claims and usually reflects return-to-work outcomes for the same job and responsibilities a worker had before his or her workplace incident or injury.  Return to work is considered successful if it is within 26 weeks (from the date the employee is unable to work due to injury), voluntary (not under objection), and durable (no subsequent claim activity for 30 days after return).

[4] 2012 marked the first year that WSBC made provisions for psychological health claims.