Policy
WorkSafeNB operates on the principle of collective liability, which means that the revenue from the entire assessed employer population is pooled to maintain the workers’ compensation system.
When determining assessment rates for individual employers, WorkSafeNB takes into account an employer’s accident history through WorkSafeNB’s Experience Rating System.
The objective of the experience rating system is to improve equity in sharing the costs of the system among employers by:
- Increasing employers’ accountability for their individual claim costs; and
- Providing an incentive for implementing accident prevention measures and promoting early and safe return to work.
Interpretation
- The experience rating system provides employers with a rebate or surcharge on their assessment rate depending on their claim cost experience relative to their assigned rate group’s claim cost experience.
- Employers qualify to participate in the experience rating system if their basic average annual assessment premium is $2,000 or more over the exposure period.
- The employer’s participation level is based on the historical payroll and rates of their current industry. Employers with an average assessment of $2,000 participate at the minimum level of 25%. The participation level increases uniformly as average assessment premiums increases up to the maximum participation level of 100% when average assessment premiums are equal to or higher than $58,250.
- The experience rating program is designed to be approximately revenue neutral for each rate group.
- Rebates and surcharges are determined by:
- Calculating the employer’s and the rate group’s cost ratio;
- Adjusting each rate group’s cost ratio until approximate revenue neutrality is achieved;
- Determining the variance between the employer's cost ratio and the rate group's adjusted cost ratio;
- Adjusting the employer’s rate up or down by 1% for every 2.5% variance between the employer’s cost ratio and the rate group’s cost ratio to a maximum rate rebate of 40% or a maximum rate increase of 80%; and
- Prorating the rebate or surcharge by the employer’s participation level.
- WorkSafeNB uses the following information when determining experience rating cost ratios:
- A three-year exposure period;
- New injury costs up to the maximum per claim cost level for accidents that occur during the exposure period; and
- Maximum per claim costs level for fatalities that occur during the exposure period, regardless of actual costs.
- Claims accepted for COVID-19 in accident years 2020, 2021, and 2022 will not be included in determining employers’ experience rating cost ratios.
- The maximum claim cost is equal to the maximum assessable earning, rounded to the nearest $2,500. For more information on the maximum assessable earning, please see Policy 37-110 New Brunswick Industrial Aggregate Earnings.
Accident – includes a wilful and intentional act, not being the act of a worker, and also includes a chance event occasioned by a physical or natural cause, as well as a disablement caused by an occupational disease and any other disablement arising out of and in the course of employment, but does not include the disablement of mental stress or a disablement caused by mental stress, other than as an acute reaction to a traumatic event. (WC Act)
Assessment premium – is equal to the assessment rate multiplied by $100 of assessable payroll.
Cost Ratio – refers to the new injury costs during the exposure period divided by total assessable payroll during the same time period.
Experience rate – is the adjustment applied to the basic rate to reflect employers’ cost experience.
Exposure period – for the purpose of this policy, it is a period of time containing the data used for setting experience rates. This period is equal to the three most recent completed calendar years preceding the year of calculation. For example, the rates for 2013 are calculated in 2012 taking into account data from 2009 to 2011.
Fatality – an occurrence of death as a result of an accident that arose out of and in the course of employment.
New injury costs – total direct claim-costs arising as a result of an accident that arose out of and in the course of employment that occurred within the exposure period. Costs associated with accidents that occurred outside the exposure period are not included as new injury costs in the experience rating process.
Rebate – a discount on assessment premiums.
Surcharge – an additional charge on assessment premiums.
