Another significant Workplace Safety and Insurance Board (WSIB) change is the draft Work Reintegration New Experimental Experience Ratings (NEER) policy. The new Work Reintegration NEER policy, which came into effect on December 1, 2010, subject to a consultation period until February 15, 2011, expands the window of retrospective rating of claims costs for those employers subject to NEER to four years from the current three years, beginning with the 2008 accident year. Why? The NEER window can directly influence the return-to-work process. The WSIB believes that an expanded NEER window will result in significantly improved work reintegration outcomes, overall cost reductions and fair premiums for employers.
These new policies combined will require greater involvement on the part of the original employer to foster successful work reintegration.
The New Experimental Experience Ratings Plan applies to all employers in Schedule 1 paying more than $25,000 in average annual WSIB premiums. NEER generates premium refunds and surcharges based on an employer’s historical accident cost experience, taking into account the calculation of claims cost, the overhead costs and future costs of benefits relating to the claim.
In general, the WSIB’s NEER program is intended to promote good health and safety practices, early and safe returns to work and appropriate disability management practices. Nevertheless, the current incentive to promote early and safe return to work with pre-injury employers may actually be contributing to a disproportionate number or workers being referred for labour market re-entry services rather than accommodated with their pre-injury employers. Specifically, employers in the NEER program have no financial incentive or accountability to continue efforts to re-employ injured workers in suitable and sustained employment beyond three years, after the NEER review window closes. This does not benefit injured workers and creates a more costly insurance system for employers. That is why as part of the work reintegration policy, the WSIB is extending the NEER review window to four years, starting with the 2008 accident year as a incentive to the early and safe return-to-work process. As a result of the new Work Reintegration NEER policy, claims costs may impact any employer’s overall premiums for a longer duration than before.
The proposed changes to the NEER policy do not affect those employers subject to the CAD-7 experience rating plan (construction industry employers with more than $25,000 in average annual premiums) or those employers subject to the Merit-Adjusted Premium program (employers with $1,000 to $25,000 in average annual premiums). Employers with less than $1,000 in average annual premiums are not experience-rated.
At this point, the only major change with the NEER incentive program involves extending the window. There are no proposed changes to claim costs or firm limits, or any other design feature of the program, although it is expected these will be reviewed as part of the current WSIB funding review.
Ontario employers should review their current return-to-work policies to ensure consistency with the new WSIB work reintegration and NEER changes, particularly in light of the significant penalties in case of non-compliance.
First Reference Human Resources and Compliance Managing Editor