5 Workers Compensation 2021 PDF

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School of Business, Centennial College Course: Employee Health and Safety (HRPD-707) Instructor: Wenlu Feng Lecture 5: Workers’ Compensation (Reference reading in the text: Chapter 3) Learning Objective After this lecture, we should be able to: 1. Outline the goals and historical roots of Workplace Safety and Insurance Boards (WSIBs) 2. Describe the administration and responsibilities of WSIBs 3. Discuss the problems associated with compensation for psychological conditions and occupational illnesses 4. Understand the methods how to calculate the WSIB premium an employer pays Introduction to Workers’ Compensation Workers’ compensation is a form of insurance governed by Worker’s Compensation Act (Workplace Safety and Insurance Act in Ontario). Workers’ compensation ensures that an injure worker receives: - First aid treatment on the job or at the nearest local treatment facilities - Benefits while he/she is at home recuperating from injury - Proper treatment for his/her injury (e.g. rehabilitation, training, modified job duties) Workers’ compensation was first established in Canada in 1914, when the Ontario Workers’ compensation Act was passed by parliament. Now in Ontario, the name of the workers’ compensation board is Workplace Safety and Insurance Board (WSIB) following the passage of Workers’ Compensation Reform Act in 1998. Employer-funded The WSIB is entirely financed by employer premiums. It receives no money from the Ontario provincial government. No-fault collective liability Fundamental to the system was (and still is) an historic compromise in which workers give up the right to sue for their work-related injuries, irrespective of fault, in return for guaranteed compensation for accepted claims. Employers, for their part, receive protection from lawsuits in exchange for financing the program through premiums. This system of collective liability provides fair compensation for injured workers and their families, while spreading individual costs among employers. And, as in other insurance schemes such as auto insurance, dangerous industries with more claims costs pay higher premium rates. Administration and Responsibilities of WSIB: - The injured worker will receive payment while off work and will have all medical bills paid if the injury happened at work and because of work. - The injured worker will receive a pension if the disability is or becomes permanent - The injured worker will receive benefits if he/she cannot earn the same amount of money earned prior to the accident - The injured worker’s immediate family and dependents will be entitled to benefits if the worker is killed as a result of an injured on the job - The workers’ compensation boards classify employers to ensure consistency

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The workers’ compensation boards decide whether an individual is classified as a worker, a subcontractor, or employer The worker’s compensation will pay benefits if a worker is affected by an industrial/occupational disease The workers’ compensation board oversees workplace safety education and training

WSIB Benefits (Source: The following information is cited from the WSIB Website: www.wsib.on.ca) 1. Benefit for Loss of Earnings (LOE) If you miss time from work because of a work-related injury or illness, our insurance pays for loss of earnings. This benefit starts from the working day after the injury or illness occurred. How we calculate your loss of earnings benefit depends on the date the injury occurred. Date of injury Rate Based on On or after January 1, 1998 85 % Take home pay 90 % Take home pay April 2, 1985 to December 31, 1997 Before April 1, 1985 75 % Pay before deductions We base benefit payments on an annual wage ceiling. Wages you receive above this ceiling are not covered. The annual wage ceiling is based each year on 175% of the average industrial wage (AIW). The WSIB Maximum Insurable Earning Ceiling for 2021 is $97,308, (compared to $95,400 for 2020, $92,600 in 2019, and $92,300 in 2018) for Ontario, pay exceeding that amount is not covered How long will I receive LOE benefits? Loss of earnings benefits continue until you are no longer impaired by your workrelated injury or illness, or until you no longer have a loss of earnings, or until you reach age 65. If you are still impaired at age 65, LOE benefits stop, but loss of retirement income benefits may apply. If you are 63 years old or older at the time of injury, you can receive LOE benefits for up to two years as long as you have loss of earnings. How often will I be paid? You'll receive an LOE payment every two weeks. After 72 months, the LOE benefit is made permanent. It may be turned into a lump sum payment if the amount of the benefit is less than 10% of what you would have received if you were unable to work at all. Is the LOE benefit adjusted for inflation? Yes. Each year, the WSIB adjusts LOE payments to take inflation into account. How is my pre-injury take-home pay calculated? The first 12 weeks of your LOE is based on your Short-term Average Earnings. These are all of the earnings you have with all your employers at the time of your injury and include most pay items that would regularly appear on your pay cheque. If you are in a non-permanent or irregular job where earnings fluctuate If your Form 7 indicates seasonal or irregular employment, after 12 weeks your adjudicator will recalculate your benefit based on your Long-term Average Earnings.

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These include all earnings you had in the 24 months before the injury. If you are in a permanent and regular job The WSIB does not automatically recalculate your average earnings since your longterm average earnings are expected to be the same as your short-term average earnings. You or your employer may request a recalculation if either of you believes that the short-term average earnings don't accurately reflect your earnings for the year before your injury. In this case, recalculation is normally based on the 12 months of employment before the injury. 2. Health Care Benefits In addition to loss of earnings benefits, WSIB benefits pay for a number of costs related to workplace injury and illness, including:    

Health care Prescription drugs Medical devices and orthotics Transportation costs associated with work-related injury or illness.

In most cases, we pay the health care provider directly. Your adjudicator, together with your nurse case manager, will advise you on how to claim for these benefits and how each benefit is paid. Prescription Drug Expenses Most of the time, the pharmacist can bill us directly online for your claim-related medications. Provide the pharmacist with your claim number and ask to have your prescription processed through our WSIB online system. If for any reason the cost of your prescription cannot be approved electronically, please complete a Medication Reimbursement Form. Your pharmacist has this form or you can download and fill out a WSIB Medication Reimbursement Form. Be sure to attach your original receipts to the completed form, and sign it, before mailing it in.

3. Benefit for Non-Economic Loss (NEL) If you suffer permanent impairment from a work-related injury or illness, we pay you a non-economic loss benefit to compensate you for the physical, functional, or psychological loss the impairment causes. This benefit is determined when your condition has reached a point where no further improvement can be expected. The amount paid is based on a legislated base amount times an impairment rating. Your Medical Examination To receive a NEL benefit, you must have a medical examination to assess your condition. The WSIB will send you a list of doctors specially trained to assess your type of injury or disease and you can choose which doctor from this list examines you. We'll reimburse you for travel expenses if there is no suitable doctor in your area, and for lost wages that result from attending the exam.

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After the exam, the doctor will send us a medical report. We will review this report and use it to calculate your NEL benefit. You and your employer will each receive a copy of the doctor's report. (Note: If you live outside Ontario, or are incapable of travelling to an exam, the process for your medical examination is different; you will receive individual instructions in these cases.)

Example of a non-economic loss benefit calculation Let’s say that you were 52 years old at the time of injury (7 years over age 45) and you reached maximum medical recovery in the year 2018. The base amount for people whose maximum medical recovery date is in 2018 is $59,981.69, and the adjustment amount is $1,333.42. As a result, we reduce the base amount of $59,981.69 by the age adjustment factor of ($1,333.42 x 7) to get the adjusted base amount: $59,981.69 - ($1,333.42 x 7) = $50,647.75 (adjusted base amount) We multiply the adjusted base amount by your whole person impairment percentage to calculate your non-economic loss benefit. If your whole person impairment is rated at 15%, your non-economic loss benefit is: $50,647.75 x 15% = $7,597.16 Now let’s say you were 40 years old at the time of injury (five years under age 45), the base amount of $59,981.69 is increased by the adjustment amount of ($1,333.42 x 5) to get the new base amount: $59,981.69 + ($1,333.42 x 5) = $66,648.79 (adjusted base amount) Using the adjusted base amount, your non-economic loss benefit is: $66,648.79 x 15% = $9,997.32

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How are NEL benefits calculated? Your NEL benefits are calculated by expressing your impairment as a percentage – the more serious your impairment, the higher the percentage. This percentage is then multiplied by a base amount determined by law. Your benefit is also adjusted for your age.

Example of a non-economic loss benefit calculation Let’s say that you were 52 years old at the time of injury (7 years over age 45) and you reached maximum medical recovery in the year 2018 . The base amount for people whose maximum medical recovery date is in 2018 is $59,981.69 , and the adjustment amount is $1,333.42 . As a result, we reduce the base amount of $59,981.69 by the age adjustment factor of ($1,333.42 x 7) to get the adjusted base amount: $59,981.69 - ($1,333.42 x 7) = $50,647.75 (adjusted base amount) We multiply the adjusted base amount by your whole person impairment percentage to calculate your non-economic loss benefit. If your whole person impairment is rated at 15%, your non-economic loss benefit is: $50,647.75 x 15% = $7,597.16 Now let’s say you were 40 years old at the time of injury (five years under age 45), the base amount of $59,981.69 is increased by the adjustment amount of ($1,333.42 x 5) to get the new base amount: $59,981.69 + ($1,333.42 x 5) = $66,648.79 (adjusted base amount) Using the adjusted base amount, your non-economic loss benefit is: $66,648.79 x 15% = $9,997.32 How is the NEL benefit paid? NEL benefit amounts under $12,249.65, NEL is paid in a lump-sum. If your benefit is over $13,001.99, you may choose to receive your benefit in monthly installments for the rest of your life, or as a lump sum. To choose the lump sum option you must notify the WSIB within 35 days of your benefit being determined.

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What if my condition gets worse? If you have medical evidence that your condition has worsened significantly, you can ask for a review 12 months after the date of the latest WSIB NEL decision. In exceptional cases, the 12-month rule may be waived. 4. Loss of Retirement Income (LRI) Benefit If you are under 64 years of age and have received loss of earnings (LOE) benefits for 12 continuous months, the WSIB sets aside an amount equal to 5% of all subsequent LOE benefits to pay for a loss of retirement income (LRI) benefit. (This 5% is over and above your regular payments, but will not be paid to you until you turn 65.) You can also choose to make additional contributions yourself by having the WSIB deduct 5% from your payments. When you reach age 65, the WSIB pays you an LRI benefit based on   

the amount it set aside for you, plus any amount you contributed, plus any investment income that the contributions earned.

Depending on the amount of the total, your LRI benefit may be given to you all at once, or in monthly payments. (If you are eligible for monthly payments, you can decide how to distribute the total over the life of the benefit.) If you die of natural causes before you turn 65, your dependants will receive a benefit based on   

any money you contributed, plus the money that the WSIB set aside, plus any investment income that had accumulated on those amounts.

Note: If you die before age 65 but your death comes as a result of your injury, your dependants will receive survivors' benefits (instead of the amount that the WSIB had set aside and the investment income earned on that portion). If you have no dependants, your estate will receive any money that you contributed and its investment income. Your LRI benefit does not affect any retirement income you may receive from other plans (such as the Canada Pension Plan or an employer pension plan). 5. Benefit for Future Economic Loss (FEL) Benefits to replace lost future income may be available to individuals permanently injured after January 1, 1990 and before January 1, 1998. These are based on 90% of the difference between the worker's take home pay before the injury and expected take home pay after the injury. These benefits are adjusted annually for inflation. 6. The Occupational Disease and Survivor Benefits Program

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This Program provides specialized services to workers, dependents, and employers affected by certain serious occupational illnesses such as:

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Cancer Asthma Asbestosis and Silicosis Inhalation of substances and fumes Noise-induced hearing loss

If you are a worker with one of the above illnesses or conditions, or are a survivor of a worker who died from such illnesses, you'll benefit from the expertise offered by this program's specially trained personnel. Staff include senior adjudicators, physicians, an occupational hygienist, and nurse case managers, all of whom are experienced with the unique circumstances of occupational illnesses. If you are a worker with an occupational disease claim, your claim will be adjudicated through this program and you will also receive special services to help you and your family cope with the effects of the disease. For more information, please call (416) 344-1010 or 1-800-465-9646. 7. Benefits for Seriously Injured Workers Your support team Each seriously injured/severely impaired worker has a support team from our Serious Injury Program. Your support team meets together to learn about your case and find the best solution for you. Your team will have:  a Claims Adjudicator  an Independent Living Consultant  a Nurse Case Manager; and  a Special Needs Controller Who are severely impaired workers? We consider impairment to be severe if the degree of impairment  is permanent and you receive a 60% or more non-economic loss (NEL) benefit in one or more files;  is permanent and is recognized, in one or more claims, by permanent disability (PD) benefits totaling 100%; or  is, in the opinion of a WSIB health care professional, likely permanent, and at a 60% or more NEL or a 100% PD benefit. Learn more about WSIB benefits and services. Your Guide to Independent Living (734k, pdf) REVISED provides comprehensive information about WSIB benefits and services for severely impaired workers, as well as a list of useful community supports that can help seriously injured workers and their families. To view the Guide you will need Acrobat Reader.

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WSIB Premiums Assessment How Much Will a Company Pay in WSIB Premiums? Your premium payments will depend on the following elements: 1) Health and safety risk of your type of business, 2) The size of your payroll, 3) Your company's health and safety record 1) Your Type of Business: Classification Units and Rate Groups The WSIB groups businesses that do the same types of work into Classification Units (CUs). CUs are then placed into Rate Groups based on similar expected risks and rates of injury and illness. Each year, the WSIB sets premium rates for each Rate Group according to the group's injury and illness record and costs. Rate groups that have higher risks for injury and illness are charged higher premiums. (Your Classification Unit, Rate Group, and premium rate are printed on your Premium Remittance Form.) The premium is determined by WSIB/WCB at least once a year, setting a rate/percentage to be applied to the payroll of the employer. Premium rate increases and decreases are linked to injury frequencies and costs for each rate group. Overall improvements in these two factors generally translate into a decrease in the group premium rate. 2) The size of your payroll Determine Annual Insurable Earnings: For each worker on your payroll, use their insurable gross earnings, as show in Box # 14 of T4, then apply the annual maximum amount for insurable earnings to eliminate excess earnings not covered. WSIB sets this maximum amount for insurable earnings each year, based on the average industrial wage (AIW) for Ontario. This maximum amount for insurable earnings for each worker is $97,308 in 2021 The premium rate applies to every $100 of the total annual insurable earnings in a company’s payroll. For example, if a company’s group premium rate is 2.50, and its total annual insurable earning in the payroll is $1,000,000, then the company’s annual WISB premium will be: $1,000,000 ÷ 100 × 2.50 = $25,000 3) Your company's health and safety record

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Experience Rating Experience rating –An accident insurance premium-pricing scheme that takes into account the clear cost experience of the individual employer. Under this scheme, the premium for each firm may be higher or lower than the basic rate for the relative group. Experience rating is a process of rewarding good performance and penalizing poor performance in workplace health and safety (Something similar to your auto insurance). Practice: Calculating Injury Frequency and Severity/Injury Cost Rates (See handout for Exercise) Workwell Program Two major components of the Workwell program: - To assist employers who have demonstrated good occupational health and safety programs. - To penalize employers who have demonstrated poor injury cost and frequency histories. Criteria used in Workwell program: 1. Injury costs 2. Experience rating 3. Order under Occupational Health and Safety Act How Organizations Can Manage Disability? 1. Create and run an effective corporate culture that values employees and establish them as an integral part of the workforce 2. Ensure senior management support 3. Intervene early and regularly 4. Develop case management capacity 5. Create modified and light duty jobs to allow early return to work 6. Train supervisors and to encourage and facilitate an early return to work 7. Create data system. Related Websites: 1. www.wsib.on.ca (Ontario Workplace Safety and Insurance Board) 2. www.e-laws.gov.on.ca (Government of Ontario’s e-law Website) Suggested self-study work: 1. Study the Workplace Safety and Insurance Act through the Website of Ontario Workplace Safety and Insurance Board (www.wsib.on.ca/reference) 2. Get detailed information about WSIB premium through the Website 3. Get detailed information about WSIB benefits for injured workers through the Website

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