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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:  WSBC Consolidated Financial Statements.

 

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 Change
2012-2016
Change
2015-2016
Injury rate[2] 2.34 2.30  2.27  2.23  2.20  -6.0%  -1.3%
Total duration[3]  60.0  57.7  55.3  54.3  54.2  -9.7%  -0.2%
Average weekly wage           $853  $862  $866  $878  $890  4.3%  1.4%
Number of claims  50,296  49,853  49,746  49,322  48,775  -3.0%  -1.1%

          Source:  WSBC Statistics 2016.

 

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

          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 Change
2012-2016
Change
2015-2016
Short term disability $276,307 $257,013 $240,909  $236,014  $261,841  -5.2%  10.9%
Long term disability $280,614 $271,527 $264,728  $270,511 $285,690  1.8%  5.6%
Survivor benefits        $27,835 $29,217 $30,119  $32,470 $23,878 -14.2%  -26.5%
Health care $305,998 $294,138  $289,855 $287,266  $314,509  2.8%  9.5%
Vocational rehabilitation $56,237 $56,250 $53,959 $63,337 $84,883 50.9% 34.0%
Total costs $946,911 $908,145 $879,570 $889,598 $970,801 2.5% 9.1%

          Source:  WSBC Statistics 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] Duration is the average number of workdays lost per accepted claim.

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