Employer assessments cut by 30%

October 4, 2018

The WSIB has decided to cut employer assessments for 2019 by 30%, arguing that the unfunded liability has been paid off and current assessments at this new much lower rate are likely to cover current costs (http://www.wsib.on.ca/WSIBPortal/faces/WSIBDetailPage?cGUID=WSIB073937&r...).

But the WSIB had several choices:

1. increase benefit levels and adjudicate fairly
2. run a modest surplus
3. cut assessments

Of course, the Board could have done some combination of all three things, to take into account the history of the unfunded liability and an awareness of the current stage in the economic cycle. It chose instead to please its ideological masters in the provincial government. This will not end well for injured workers, but it may take a few years to feel the effects.

The history is well recounted in Antony Singleton's blog post The Reward for paying down the WSIB's Unfunded Liability (https://justcompensation.ca/2018/09/27/the-reward-for-paying-down-the-ws...). Employer premium reductions, directly and by the "off-balance"- the excess of refunds over penalites- in the experience rating system, made a large contribution to the size of the unfunded liability. And benefit cuts to injured workers, directly by law and less directly by policy and by arbitrary administrative action, was the largest contributor to the elimination of the unfunded liability. The blog post lists a number of injured worker contributions:

1. reduction in benefit levels in 1998 from 90% of net earnings to 85%
2. halving of WSIB contribution to injured worker retirement benefits
3. reduction in cost-of-living increases
4. reduction in medication reimbursement
5. increase in early return to work against advice of treating doctors
6. routine use of asymptomatic pre-existing conditions to reduce or terminate benefits
7. restrict coverage for recurrences

I would add that the claim denial/abandonment rate is up. In 2009, there were 207,296 claims with 50,104 allowed lost time claims (24.17%) and 115,340 no-lost time claims (55.64%). In 2017, there were 199,870 claims with 44,660 allowed lost time claims (22.34%) and 111,411 no-lost time claims (55.74%). The reduction of almost 2% in the number of allowed lost time claims among all registered claims is significant. Ontario has by far the lowest allowed claim rate among the provinces and this was not so in 2007 (Please see charts 1.1, 2.1 and 2.5 in the 2017 WSIB statistical supplement- http://www.wsibstatistics.ca/images/S1_By%20The%20Numbers.pdf).

A "prudent moderate" government would acknowledge the contributions of injured workers and employers in the slaying of the unfunded liability. It would also recognize that the WSIB will need a little financial leeway at some point, and perhaps within the time frame of the current government's mandate. In the absence of such a government, injured workers and their allies need a prudent but not-moderate program ready for when the tide turns.