This site will look much better in a browser that supports web standards, but it is accessible to any browser or Internet device.
This is the dollar amount per $100 of assessable payroll WorkSafeBC must collect to cover the anticipated cost of new claims that are incurred by the rate group in a given rate year, and the future cost of administering those claims.
The total cost rate comprises of the following components:
Average benefit cost rate
The average benefit cost rate is used to calculate the base rate. It includes the multi-year average of short term disability, long term disability, survivors’ benefits, health care, and rehabilitation costs charged directly to the rate group. This figure is calculated by dividing the total accumulated costs (paid and anticipated future costs) by the total accumulated payroll, over the number of years required for credibility.
This is the amount charged to the rate group to cover all future costs of administering new claims occurring in the given rate year. These costs include any goods or processes provided or performed for the primary purpose of assessing the claimant’s entitlement to an award or the amount of the award, overall management or re-opening of a claim, as well as the function of making payments under the claim.
Accident fund adjustment
This adjustment accommodates for changes between board-wide actual historical claims cost experience and what is anticipated to be paid on those historical claims given current conditions. This includes such changes as the allocation of Section 39 costs and cost reductions arising from recent legislative changes which are spread across all industries.
Penalty and experience rating imbalance adjustment
This figure represents the adjustment to the rate to cover anticipated premium losses or gains that result from experience rating adjustments as well as assessment and prevention penalties.
Other administration costs
This is the amount charged to a rate group to cover its share of the cost of administering the workers’ compensation system, other then the cost of administering claims. For details, please refer to the 2004 Annual Report.
This adjustment provides for funding of deficits (a rate increase) or for a return of surpluses (a rate decrease), plus contributions to provide for any necessary reserves. This is generally amortized over five years. The amortizations can vary for each classification unit. A rate group’s amortization adjustment figure represents the average amortization of all the classification units in its rate group.
The actuarial rate for a rate group is the average of the actuarial rates for all its component classification units. This includes the amount required to cover the projected costs of new claims, administration and miscellaneous costs (the total cost rate), and an amortization element to recognize the surplus or deficit position of a classification unit (the amortization adjustment).
This adjustment accommodates for the WorkSafeBC policy of limiting base rate changes from year to year (the normal maximum change is +/- 20 percent). It also accommodates for any recent emerging claim cost trends which significantly deviate from the normal long term actuarial assumptions used for rate setting.
These initiatives are typically funded by adding a levy to the classification unit (CU) base rate of employers that participate in industry sponsored safety programs. CUs with an industry-funded initiative generally have higher base rates than that of their rate group.
Classification units of federally regulated industries are exempt from prevention inspection activities. As such, they may have a reduction applied to their base rate.
Here are the main reasons why a base rate for a classification unit (CU) may vary from other CUs in the same rate group.