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Why Performance Matters

Posted in: WCB Premium Reduction | Posted by Rebecca Ingram on September 11, 2017

When it comes to WCB premiums, it is an employer’s performance – in terms of the number and severity of work-related accidents, incidents and illnesses – that has a significant impact on premium rates. Simply put, employers who have a large number of WCB claims and high WCB claims costs will pay more in WCB premiums than employers with few or no WCB claims and little or no WCB claim costs.

Although the WCB provides discounts and rewards for employers with good accident records, the primary incentive to get employers with poor performance histories to make immediate improvements to their disability management and prevention programs is through monetary repercussions. The Poor Performance Surcharge (PPS), which is levied on large employers (i.e. employers who pay more than $15,000 per year in industry rated premiums in a 3 year period) who have consistently poor accident records over consecutive years. It is, perhaps, the most detrimental penalty assessed by the WCB and the one most often overlooked by employers. This surcharge can result in as much as a 200% increase in their WCB premiums.

A PPS is applied to an employer when they meet the following 2 criteria:

  • They have hit the maximum experience rated surcharge for their employer size for 2, or more, consecutive years (which means they are already getting hit with up to a 40-60% surcharge on their basic premium rate, given the Experience Rating Plan they fall under).

and

  • They have 4 or more experience rated claims for at least 2 consecutive periods.

The percentage of PPS is determined by the number of consecutive years an employer meets the above criteria:

Number of Consecutive Years           PPS Amount

1                                                               0%

2                                                              25%

3                                                              50%

4                                                              100%

5 or more                                              200%

As much as the WCB uses a PPS as a wake-up call to employers to address their health and safety management and prevention systems, the reward for improvement is substantial and swift. Any employer that is paying a PPS can get it wiped out entirely by having one year of improved performance. A single year with less than 4 WCB claims or a reduction in experience rated claims costs below their established cap, will reset the criteria and automatically remove a PPS – regardless of the percentage assessed. That is an automatic savings of up to 200% on premium calculations.

The removal of a PPS is the WCB’s way of acknowledging an employer’s improved performance while providing them with an opportunity to better their overall safety practices moving forward. There are a number of tools and services that employers can use to reduce the risk and contain costs of any WCB claims including:

Even though the PPS seems like it is all about dollars and cents, the ultimate goal is to provide  a safe environment for workers while preventing injury and illness – that starts with the employer, which is why the buck stops there as well.

If you would like to know how a PPS is affecting your WCB premium rate or for further information/explanation of WCB Premiums, WCB pricing programs and/or WCB claims management, you can connect with us on Facebook Twitter , or LinkedIn, reach us via email at [email protected][email protected], or contact us directly, during business hours, using our chat feature and you can always call us at 1-844-377-9545.

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