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 administration costs for the year for administering these benefits.

We're pleased to provide Schedule 2 employers with details about their 2021 provisional administration rate along with an update on the latest forecast for their 2020 administration rate below. In the summer of 2021, we will announce what the actual administration rate was and provide an adjustment to reflect any differences between the actual and provisional rate.

The WSIB has committed to allocate any COVID-19 related claim costs on a Schedule-wide basis. Schedule 2 Employers will receive a credit at the employer level for allowed COVID-19 claims costs. These COVID-19 costs could then be allocated to all Schedule 2 employers by including the total amount as a charge in the Schedule 2 admin rate.

You can view the FAQ below to learn more about the 2021 provisional administration rates and latest forecast. If you have any further questions about the 2021 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 2021 provisional administration rate for provincially regulated employers is 24.6 per cent of expected benefit payments. This is a $5.5 million increase in total expenses and a $35.3 million increase in benefit payments from the 2020 provisional administration rate. In addition, the 2021 provisional administration rate includes an estimate to cover COVID-19 allocated costs.

Summary of the costs used to determine the 2021 provisional administration rate

Costs allocated to employers 2021 estimate ($000)

WSIB administration

58,466

Legislative obligations

3,744

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

23,351

Other expenses collectively charged **

4,201

Total costs

89,762

Total benefits

414,797

COVID-19 %

2.94%

Provisional administration rate (Costs/Benefits) x 100% + COVID-19%

24.6%

* 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 2020 administration rate

The 2020 administration rate initially set at 22.2 per cent of expected benefit payments is anticipated to remain at 22.2 per cent at year end. This includes COVID-19 costs that were not anticipated when setting the 2020 Administration Rate. 

Federally regulated employers

The 2021 provisional administration rate for federally regulated employers is 19.0 per cent of expected benefit payments. This is a $0.8 million increase in total expenses and a $5.2 million increase in benefit payments from the 2020 provisional administration rate. In addition, the 2021 provisional administration rate includes an estimate to cover COVID-19 allocated costs.

Summary of the costs used to determine the 2021 provisional administration rate

Costs allocated to employers 2021 estimate ($000)

WSIB administration

4,506

Legislative obligations

289

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

0

Other expenses collectively charged **

324

Total costs

5,119

Total benefits

31,972

COVID-19 %

2.94%

Provisional administration rate (Costs/Benefits) x 100% + COVID-19 %

19.0%

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

Update on 2020 administration rate

The 2020 administration rate initially set at 16.1 per cent of expected benefit payments is anticipated to be 16.4 per cent at year end. . This increase is a result of COVID-19 costs that were not anticipated when setting the 2020 Administration Rate. 

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

The 2021 provisional administration rate for employers covered under the Government Employees Compensation Act is 18.9 per cent of expected benefit payments. This is a $1 million decrease in total expenses and a $5.9 million decrease in benefit payments from the 2020 provisional administration rate. In addition, the 2021 provisional administration rate includes an estimate to cover COVID-19 allocated costs.

Summary of the costs used to determine the 2021 provisional administration rate

Costs allocated to employers 2021 estimate ($000)

WSIB administration

8,852

Legislative obligations

567

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

0

Other expenses collectively charged **

580

Total costs

9,999

Total benefits

62,803

COVID-19 %

2.94%

Provisional administration rate (Costs/Benefits) x 100% + COVID-19 %

18.9%

* 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 2020 administration rate

The 2020 administration rate initially set at 16.0 per cent of expected benefit payments is anticipated to be 16.3 per cent at year end. This increase is a result of COVID-19 costs that were not anticipated when setting the 2020 Administration Rate. 

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 2021 provisional administration rate?

The WSIB’s 2021 administration expenses are expected to be higher than those of 2020. A higher forecast is expected for PTSD and CMS claims in 2021, as well as a continuation of pre-COVID-19 increasing trends in physical injury claims for the Provincially regulated and Federally regulated employer groups and a decrease in estimated claims for the GECA employer group.

In addition to total expenses and benefit payments, costs related to COVID-19 claims have been added to the admin rate as part of the WSIB’s commitment to allocate COVID-19 related claims costs on a Schedule-wide basis. 

What is the reason for the latest forecast since you released the 2020 provisional administration rate

Since the release of the 2020 provisional admin rate, we’ve experienced a reduction in administration expense and a leveling of the benefits paid. An additional factor in the latest forecast are COVID-19 costs which weren’t anticipated when setting the 2020 administration rate. This includes new COVID-19 claims and the economic consequences resulting from measures to address the global pandemic. 

What happens if the actual rate for 2020 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 2020 Actual rate will be released in August 2021 and the 2021 actual rate will be released in August 2022.

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.