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2015 premium rates

WorkSafeBC announces that the average base premium rate for 2015 will remain unchanged at $1.70 per $100 of employers' assessable payroll.

Although we've seen an increase in claims costs in Long Term Disability awards and Health Care, excess investment returns, a $117 million withdrawal from the Capital Adequacy Reserve, and the longstanding practice of capping of rate increases for industries at 20 percent have kept the average rate from increasing next year.

Together with employer groups, we're working to reduce serious injuries and enhance return-to-work opportunities. In doing this, we can collectively help to prevent injuries, improve return-to-work outcomes, and ultimately lower insurance rates.

Employers are assigned to one of 549 classification units with other similar businesses. These classification units are then pooled into one of 63 insurance pools we refer to as rate groups.

Employers in each rate group pay the costs of injuries and diseases that occur to the workers within the group, with the intent that each rate group be self-sufficient with regard to compensation costs. This limits cross-subsidization between industries, maintains relatively stable base premium rates, and limits growth of unfunded liabilities in the insurance pools.

Each year, costs in some rate groups go up, some go down, and others stay the same. This year, 44 percent of employers will experience an increase to their industry base premium rate, 54 percent a decrease, and two percent will see little or no change.

WorkSafeBC publishes two measures of the overall "average rate". The first measure is the "published base premium rate" which is released at the time that rates for the upcoming assessment year are announced. This is an estimate based on long term payroll growth expectations. The second measure is the "aggregate premium rate" which represents the actual premiums paid by employers expressed as a percentage of their actual payrolls. These measures are published in the WorkSafeBC Annual Report (for 2014, see page 51) and are summarized as follows:

 

Assessment year 2011 2012 2013 2014 2015
Published base premium rate* $1.54 $1.54 $1.63 $1.70 $1.70
Aggregate premium rate* $1.51 $1.48 $1.54 n/a n/a

*Note: rates are expressed as a premium per $100 of assessable payroll 

Here is a more in-depth description of these average rates:

Published base premium rate

This rate is the average base rate communicated as a news release each autumn once the Board of Directors has approved the industry base rates for the upcoming assessment year. It represents a composite of all the individual industry base rates published by WorkSafeBC averaged on the basis of estimated long term industry payroll growth trends. Once the rates for the upcoming assessment year have been approved by the Board of Directors, the corresponding published base premium rate does not normally change - the exception is on those rare occasions when some individual industry rates get retroactively changed after the initial approval as a result of exceptional circumstances.

Aggregate premium rate

This rate is the composite of the individual industry base rates published by WorkSafeBC averaged on the basis of the actual payrolls reported by employers for the assessment year. In addition, the aggregate premium rate is adjusted for:

  • Any net imbalance created by the experience rating plan
  • Any premium shortfall created by base rate transition rules
  • Any pre-2000 surplus or interest on that surplus credited to employers in the assessment year to reduce the net amount of premium payable to WorkSafeBC

This is equivalent to expressing the actual total collected premiums for the assessment year as a percentage of the actual total assessable payroll for that same assessment year. The most recent figure quoted for the aggregate premium rate is based upon anticipated premiums and payrolls, and will in general be revised in the following year, once actual premiums have been paid and actual payrolls have been reported.

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