Effective January 1, 2018, the WSIB has implemented several changes that will impact future rates both for WSIB and Long Term Disability (LTD) insurance benefits. Much of the literature on these changes is complex and a bit of a confusing read but the essence of these changes is: Some disability claims that wouldn’t qualify for WSIB historically will now be considered going forward.
In theory, this will benefit Insurance Companies as these claims will now go to WSIB instead of being paid by the insurer.
- Will this translate into lower LTD rates for companies? Not yet.
- Will this mean higher rates for WSIB? Not yet, but it will.
- New claims that now qualify for WSIB would have been eligible under the company’s LTD benefit, so total claims (and costs) should be the same, in theory.
This change should not significantly impact an employer’s cost, except:
- Benefits paid by WSIB are generally higher than most LTD plans. This means more dollars will be paid out for the same claims
- Businesses with a history of WSIB claims pay a higher WSIB rate. While this is also true for LTD benefits, a company’s historical claims “credibility” (the part of your rate that is based on your own claims history) is calculated differently by WSIB and LTD insurers. WSIB generally gives more weight to your actual claims experience which is bad news for companies with less favorable histories.
Some additional complications:
- WSIB is reducing the number of rated industries to simplify their processes. Your rate may change if you were in one of the groups that were eliminated under these changes
- Chronic Mental Stress claims are now eligible
o What constitutes a Chronic Mental Stress Injury is not clear
o Over the next couple of years, appeals and adjudication will determine how many claims are paid and will set case law for the future
What should employers do?
- Document everything. Workplace stress can have many contributors, including the environment, industry, coworkers and managers. These are factors that WSIB will be looking at when determining the eligibility of claims.
- Involve your insurer. Even if a claim looks like it will likely be going to WSIB, complete the insurer’s paperwork to ensure that timelines are met and that the employee is not left without a benefit.
- Support your employees. The best outcome is a speedy return to work. Now is a great time to take some preventative steps in workplace Mental Health.
While case law is being established, we can expect more challenges to rulings for WSIB, especially in the area of Mental Health. This means more stress and confusion for employees and administrators. Taking a preventative approach will help make sure that your company is not helping to establish case law for the new WSIB changes.
President - HCG