In Manitoba, the rate model used to calculate employers' individual rates had not been reviewed in many years. As a result of both an internal and external review, employers were asked to provide their feedback about what changes, if any, they'd like to see.
Because of this process, the WCB began introducing changes to the rate model to improve the fairness and flexibility of WCB premiums for employers of all sizes. This process began in 2016 and will continue through 2020. The following are key features of the new rate model. Features marked with a check are fully implemented for setting your 2019 rates.
What We've Done
One of the primary objectives of the new rate model is to reflect the different realities for different sized employers. Employers are now grouped according to payroll size for the purpose of rate calculation:
- Small employers - payroll of less than $750,000
- Medium employers - payroll of more than $750,000 and less than $7.5 million
- Large employers - payroll of $7.5 million or more
We've now implemented narrower rate ranges for all employers to ensure that rate changes are less volatile and can't climb as high as they once did. The rate ranges are also based on payroll size as described below:
Previously, an employer's rate could move up at an ever increasing pace if they had high claims costs. For example, after three years of ongoing claims costs, their rate would increase by 30 per cent, after four years 40 per cent, and after five years 50 per cent. As their experience improved, their rate would decrease much more slowly. Under the new rate model, annual rate changes are capped at a maximum of 15 per cent up or down.
With our new rate model, employers' experience will carry different weight based on their size. A large employer's individual costs will have a greater impact on the premiums they pay, whereas for small and medium employers, the industry classification they are in will have a greater impact on what they pay.
|Small Employers Less than $750,000 in annual payroll||Medium Employers Between $750,000-$7.5 million in annual payroll||Large Employers More than $7.5 million in annual payroll|
|The percentage of your individual experience used to calculate your rate||20%||30-40%||40-100%|
|The percentage of your classification's experience used to calculate your rate||80%||60-70%||0-60%|
This refers to the period of time during which claim costs are accumulated to calculate an employer's experience. Under the previous rate model, the experience period was 12 months of costs for claims incurred in the previous five calendar years.
Under the new rate model, the time frame will be three calendar years of costs for claims incurred in the last three calendar years. This approach is more effective in ensuring a balance between prevention and disability management.
This new approach will be fully implemented by 2020. The calculation of rates will consider costs paid from January 1, 2016 to December 31, 2018 on claims that occurred during the same time frame. A calendar year of claims will be used to keep claim data consistent with other data reports available from the WCB.
The WCB has begun the transition of moving from nine risk categories to eighteen risk categories. The first phase of the process will involve moving employers who currently reside in risk categories that will no longer exist (70%, 120%) to new risk categories. These employers have been moved to the most appropriate new risk category based on a review of their past three years of claims costs.
70% 60% or 75%
120% 100% or 125%
The second phase of the transition will allow all industry classifications to flow within the eighteen risk categories. Movement will be as a result of four years of rate model claims data. Employers will receive notifications of possible movement based on two year trends which will be part of 2020 rates. Movement will begin for 2022 rates.
The WCB and SAFE Work Manitoba are working on strategies to help employers achieve safer workplaces and improved Return to Work programs as part of the SAFE Work Certified Program (SWC). The SWC is administered by SAFE Work Manitoba, a separate arm of the WCB responsible for illness and injury prevention programs and services.
Here's a Snapshot of the New Rate Model as of 2020
|Payroll Size||Up to $750,000||$750,000 - $7.5 million||Over $7.5 million|
|Risk Category Range||10% below to 30% above category range||20% below to 60% above category range||40% below to 120% above category range|
|Annual Basic Rate Change Limit||+ / - 15%||+ / - 15%||+ / - 15%|
|Experience Period||3 years of costs on 3 years of claims||3 years of costs on 3 years of claims||3 years of costs on 3 years of claims|
More Information about Premiums and Rates