WCB Alberta 2022 Annual Review: The Good, The Bad and The Same
Every year, the Workers’ Compensation Board (WCB) of Alberta reviews and updates various costs, expenses, allowances, and thresholds to keep in line with the current economic landscape. Changes that are approved affect numerous WCB policies and can impact payments to workers and claim costs for employers.
Managing claim costs has always been and will continue to be challenging for employers, more so when they have no control over changes being made. However, this year comes with a mixed bag of offerings for Alberta employers:
On a positive note, the WCB announced an increase of the cost threshold used to determine when a No Time Loss (NTL) claim will be used in the experience rating calculations that establish WCB premiums. Although cost threshold increases do not usually benefit employers, an increase to the NTL claims cost threshold does.
Beginning January 1, 2022, the No Time Loss (NTL) claim threshold was increased from $1,500 to $1,800, the largest single increment since January 1, 2016. Again, the increase is in recognition of the rising cost of healthcare and other services due to inflation and means that claims costs can accumulate to a greater amount before they have a negative effect on employer premiums. (Note: Claims occurring in 2022 will first be used for experience rating calculations in 2024)
More information on NTL claims, how they are adjudicated and what part they play in premium calculations can be found on our previous blog post here.
A constant of the annual updates is the Cost of Living Adjustment (COLA), which is used to prevent a decrease in benefits to injured workers as a result of economic inflation. The adjustment is applied to compensation payments and some allowances for severely disabled workers to ensure that the amounts they are receiving are reflective of current dollars. The COLA calculation is tied to the Alberta Consumer Price Index, and was set at 1.83% for 2022.
While the percentage acknowledges the rate of inflation and usually results in an increase in payment amounts to eligible workers, it can also mean an increase in claims costs for employers. Any worker who was injured on or before December 31, 2020 and is still in receipt of compensation benefits as of January 1, 2022, will see their compensation payments increase by 1.83%; this includes Permanent Total Disability (PTD), Temporary Total Disability (TTD) and Total Partial Disability (TPD) benefits, as well as payments to dependent children of deceased workers.
Additionally, COLA has been applied to home maintenance allowances (both Level 1 and Level 2), clothing allowance calculations for severely disabled workers, and the minimum and maximum limits for Non-Economic Loss Payments (NELP) resulting from Permanent Clinical Impairment (PCI) awards. Employers will feel the impact of these adjustments in the form of increased claim costs and amounts used to calculate their WCB premiums.
Although the COLA represents an increase to benefits and allowances, it may not be as bad as it seems. The majority of WCB claims with a date of accident prior to January 1, 2021 are inactive therefore, the COLA will not be applied. For those claims that remain active or where allowances are still being issued, the impact of the COLA is limited since accumulated claims costs are only used for two calendar years beyond the year of the accident.
For claims that occurred in 2020, it is only the costs that accumulate up to and including December 31, 2022, that will be used for rate-setting purposes. For claims that occurred in 2019 or before, the COLA will not impact an employer’s premium rate. This is true for wage loss benefits and allowances, so even the bad news is not necessarily that bad.
The lump-sum amount for incidental funeral and death expenses was also adjusted, however, fatality claims costs are apportioned differently than other WCB claims, therefore the increase will have very little or no impact on employer premiums.
Following the annual review, the WCB has determined that the upper limit on Maximum Compensable Earnings (MCE), Maximum Assessable Earnings (MAE), and the Maximum Per Claims Cost (MPCC) amounts would remain unchanged from 2021. Definitely welcome news for any employer that is already facing these maximums.
Travel, accommodation and meal allowances will remain the same as the 2017 rate and the maximum allowable amounts for burial, cremation and memorial expenses remain the same as the January 1, 2020 rate.
This is all positive news for employers as it limits any increase in claims costs and amounts used to calculate their premium rates.
Even though the review resulted in some cost increases, fortunately, there is nothing significant or major this year. The number of claims and the duration these changes impact those claims is limited due to a number of factors including the year of the accident, an individual employer’s MPCC, and the types of claims an employer has.
More information on WCB claims and how they affect WCB premiums can be found in our previous blog post here or at the WCB Alberta website here. Additional information on WCB NTL claims can also be found here. If you would like an additional explanation or further details on your business classification, modified duties programs, NTL claims review, or how NTL claims will affect your organization you can connect with us on our Facebook page, through our Twitter account, on our LinkedIn profile and you can always email us at [email protected] or at [email protected] or contact us directly at 1-844-377-9545.