Schedule 2 Provisional Administration Rates

Overview

Schedule 2 employers are self-insured and the WSIB administers the payment of benefits. Each year, we announce a provisional administration rate that reflects the anticipated costs for the year for administering these benefits.

Details of the 2019 provisional administration rate along with an update on the latest forecast for their 2018 administration rate are outlined below. At the end of the year, we will announce what the actual administration rate was and provide an adjustment to reflect any differences between the actual and provisional rate.

You can view the FAQ below to learn more about the 2019 provisional administration rates and latest forecast. If you have any further questions about the 2019 provisional administration rate, please call the Schedule 2 general revenue enquiry number at 416-344-3646 or toll-free at 1-800-387-0750.

Provincially regulated employers

The 2019 provisional administration rate for provincially regulated employers is 23.2 per cent of expected benefit payments.This reflects a $1.2 million increase in total expenses and a $75.7 million increase in benefit payments from the 2018 provisional administration rate.

Summary of the costs used to determine the 2019 provisional administration rate

Costs allocated to employers 2019 estimate ($000)

WSIB administration

49,138

Legislative obligations

3,030

Ministry of Labour - prevention & Occupational Health and Safety Act *

19,601

Other expenses collectively charged **

2,958

Total costs

74,727

Total benefits

321,714

Provisional administration rate (Costs/Benefits) x 100%

23.2%

* includes the Occupational Health & Safety Act (OHSA), Workplace Safety and Insurance Appeals Tribunal (WSIAT) costs and Ministry of Labour costs when applicable, among others.

** includes bankruptcies, net interest gain/loss, interest on delayed benefits, and benefit overpayments.

Update on 2018 administration rate

The 2018 administration rate initially set at 29.9 per cent of expected benefit payments is now anticipated to be 26.8 per cent.

Federally regulated employers

The 2019 provisional administration rate for federally regulated employers is 17.1 per cent of expected benefit payments.This reflects a $0.9 million decrease in total expenses and a $3.8 million increase in benefit payments from the 2018 provisional administration rate.

Summary of the costs used to determine the 2019 provisional administration rate

Costs allocated to employers 2019 estimate ($000)

WSIB administration

4,707

Legislative obligations

290

Ministry of Labour - prevention & Occupational Health and Safety Act *

0

Other expenses collectively charged **

283

Total costs

5,280

Total benefits

30,819

Provisional administration rate (Costs/Benefits) x 100%

17.1%

* includes the Occupational Health & Safety Act (OHSA), Workplace Safety and Insurance Appeals Tribunal (WSIAT) costs and Ministry of Labour costs when applicable, among others.

** includes, net interest gain/loss, interest on delayed benefits, and benefit overpayments.

Update on 2018 administration rate

The 2018 administration rate initially set at 22.7 per cent of expected benefit payments is now anticipated to be 19.8 per cent.

Employers covered under the Government Employees Compensation Act (GECA) administered by the Department of Employment and Social Development Canada (ESDC)

The 2019 provisional administration rate for employers covered under the Government Employees Compensation Act is 17.0 per cent of expected benefit payments.This reflects a $0.04 million increase in total expenses and a $15.1 million increase in benefit payments from the 2018 provisional administration rate.

Summary of the costs used to determine the 2019 provisional administration rate

Costs allocated to employers 2019 estimate ($000)

WSIB administration

9,343

Legislative obligations

576

Ministry of Labour - prevention & Occupational Health and Safety Act *

0

Other expenses collectively charged **

479

Total costs

10,398

Total benefits

61,167

Provisional administration rate (Costs/Benefits) x 100%

17.0%

* includes the Occupational Health & Safety Act (OHSA), Workplace Safety and Insurance Appeals Tribunal (WSIAT) costs and Ministry of Labour costs when applicable, among others.

** includes net interest gain/loss, interest on delayed benefits, and benefit overpayments.

Update on 2018 administration rate

The 2018 administration rate initially set at 22.5 per cent of expected benefit payments is now anticipated to be 19.6 per cent.

Technical rate sessions for schedule 2 employers

Do you want to understand how the WSIB calculates the administration rates for Schedule 2 employers? Do you want to know what is driving administration rates? In March 2019, the WSIB will be hosting a Technical Rate Session for Schedule 2 Employers. You must sign up in advance. For more details, please contact technicalratesessions@wsib.on.ca.

FAQs

How do you determine the provisional rate for each group?

To calculate the administration fee for Schedule 2 employers, we estimate the annual costs of running the Schedule 2 system at the beginning of each year. This is known as the provisional rate. There are two parts to the process of determining what rate we charge the Schedule 2 employers:

  1. We determine the administrative expenses for Schedule 2 as a whole
  2. We then determine the Administration Rate for each employer group

You can see a breakdown of each of these steps in the document Schedule 2 - Understanding the basics (PDF).

How do you get from the provisional rate to the actual rate?

After we provide the employers a provisional rate for the year, we wait until the actual experience is available for that year. At that point, we provide employers with their actual rate based on final data from the previous year. You can view more information on the rate setting cycle here (PDF).

Can you provide an explanation of the factors that resulted in the calculation of the 2019 provisional administration rate?

The WSIB’s 2019 administration expenses are expected to remain at the same level as 2018. The number of chronic mental stress (CMS) claims submitted and allowed in 2018 was lower than anticipated. However, this was off-set by an increase in post-traumatic stress disorder (PTSD) and traumatic mental stress (TMS) claims registered in 2018. A higher forecast is expected for PTSD and CMS claims in 2019, as well as a continuation of recent increasing trends in physical injury claims.

What is the reason for the latest forecast since you released the 2018 provisional administration rate

Since the release of the 2018 provisional admin rate, we’ve noticed an increase in claims – particularly those involving PTSD and TMS. Process improvements that were implemented in 2018 are expected to improve outcomes but the impact to our estimates and the timing are to be confirmed.

What happens if the actual rate for 2019 is different than the provisional rate originally released?

Depending on whether our estimates are over or under the actual costs, we either charge or credit employers any difference between the provisional and actual administration rates as a one-time adjustment. This happens in August of the following year. For example, the 2018 Actual rate will be released in August 2019 and the 2019 actual rate will be released in August 2020.

Key terms

Actual Administration Rate: The Actual Administration Rate is determined after the year ends, once the financial statement audit process is completed. An adjustment may be made to reflect differences between the Provisional Administration Rate that was billed to employers and the Actual Administration Rate.

Administration Expenses: Schedule 2’s share of the WSIB’s administrative expenses is based on the latest budget for the administration of Schedule 2 claims.

Benefit Payments: Schedule 2 employers are self-insured and are therefore liable to fund all benefit payments for their injured workers and the associated administrative costs.

Collectively Charged Expenses: There are collective expense items applicable to all Schedule 2 employers such as interest on delayed payments, benefit overpayments and more.

Latest Forecast: A latest forecast of the Administration Rates is communicated along with the next year’s Provisional Administration Rates based on updated information.

Legislative Obligations: The WSIB includes legislative obligations when determining Schedule 2 rates.

This includes the Occupational Health and Safety Act (OHSA), Workplace Safety and Insurance Appeals Tribunal (WSIAT) costs and Ministry of Labour costs when applicable, among others.

Provisional Administration Rate: A Provisional Administration Rate for a year is determined before the start of the year. This rate is charged to Schedule 2 employers based on their benefits paid on a monthly basis throughout the year.

Schedule 2 Administration Rate: The Schedule 2 Administration Rate is determined for the purpose of collecting the appropriate portion of administration expenses and collective items attributed to Schedule 2 employers.