How to Reduce the Cost of WCB Premiums
The calculation of WCB Premiums is complicated and can be daunting to understand. Some employers feel so confused by the complexity of the process that they believe that they are at the mercy of the WCB, and have no control over the rate they are assessed.
While many of the components and formulas used to determine premiums rates are fixed, there are some simple things employers can do that will have a positive impact on their rate.
Here are our top three strategies of how to reduce the cost of WCB Premiums:
- Reduce Claims Costs:
The single most important thing an employer can do is try to reduce the number of work-related claims they have, and the costs associated with those claims. The impact of claims costs can be seen in the Experience Ratio (ER), or how an individual employer’s costs compare to their industry average. This comparison will also determine the amount of discount or surcharge an employer may be eligible for as part of their base premium rate.
An employer that has four or more claims over three or more consecutive years may result in a Poor Performance Surcharge (PPS). A PPS is calculated by using the number of claims an individual employer has in a year combined with their ER. The result is a surcharge being layered on top of the surcharge already included in their base rate calculations. It is only through the reduction of the number of claims and claims costs that a PPS can be lowered or eliminated.
The employer can try to reduce claims costs by being proactive — not only in the prevention of accidents, but by making sure measures are in place to minimize costs after an accident has occurred.
- Implement a health and safety program
- Establish an effective modified duties program
- Review and revise safety procedures on a regular basis
- Enforce safe work practices
- Ensure employees are properly trained and educated for their position
- Encourage employees to identify and report unsafe conditions or hazards
- Address and fix any unsafe practices or identified hazards promptly
- File an Employer’s Report of Accident to the WCB immediately
- Offer modified duties as soon as possible
- Allow a gradual return to work with reduced hours and or duties
- Enable injured workers to attend medical appointments and physiotherapy
- Manage current claims and prevent unnecessary claims costs
- Review historical claims for areas of cost removal or cost relief
- Obtain a Certificate of Recognition (COR):
A COR is awarded to employers who develop and maintain health and safety programs that meet the requirements of the PIR program. Read more about COR in our blog, What is a Certificate of Recognition and How to Prepare for an Audit.
In addition to achieving a COR there are premium reduction incentives available by participating in PIR. You can learn more about PIR in our blog, How can the PIR Program Reduce the WCB Premium for my Company? or on the WCB website.
The following example demonstrates the impact that claims performance and claims costs can have on an employer’s financial picture:
Whether your industry has opted to participate in the WCB’s Industry Custom Pricing (ICP) option or not, you can still improve your own organization’s Experience Rating and lower your WCB premiums by implementing some or all of these strategies.
To learn more about how your organization can take action to reduce WCB premiums, you can connect with us on Facebook, Twitter, or Linkedin. Or you can reach us via email at BCL.Calgary@bclconsulting.ca,BCL.Edmonton@bclconsulting.ca, or by telephone at 1-844-377-9545.