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It’s Official:

NEER window extended to 4 years

On July 15, 2011, the WSIB’s revised NEER (New Experimental Experience Rating) Plan will come into effect.  The revised NEER policy extends the NEER window from three (3) to four (4) years beginning with the 2008 accident year.  The 2008 accident year claims, which would have undergone their final review this September 30, 2011, will now undergo their final review at the September 30, 2012 NEER review.

As an employer advocate, CompClaim participated in consultations held from November 8, 2010 to February 15, 2011.  It was our position that extending the NEER window from three (3) to four (4) years could not be justified on the basis of the underlying statutory goal: “to encourage employers to reduce injuries and occupational diseases and to encourage workers to return to work”, inasmuch as there are already legislative provisions in place to penalize employer’s for failure to re-employ workers and to observe the requirements of early and safe return to work. 

It was our further position that the most offensive aspect of the “proposed” extension of the NEER window to four (4) years commencing with the 2008 accident year is the application of retroactive effect.  Firstly, employers must engage in financial forecasting in order to ensure the continued operation of their business (and employment of workers).  The proposed change will open a floodgate of conditional liability for which previous financial planning has not taken account of.  Secondly, when significant changes to the NEER scheme have been made in the past, employers were sent hypothetical scenarios as to what their NEER assessments would have been in prior years under each of the respective formulas, prior to any decision or implementation.  The process by which the WSIB has carried out this current policy amendment is at variance with WSIB practice, and in our opinion, somewhat illustrates a lack of transparency.

For additional information regarding the details of the revised policy, please refer to WSIB Operational Policy Document #13-02-02: NEER available on the WSIB website.

We will continue to monitor the implementation of this revised NEER policy, and are prepared to assist your firm through this process.  If you have any questions or concerns, please do not hesitate to contact us.

KPMG VALUE FOR MONEY AUDIT OF

THE WSIB’S SERVICE DELIVERY

An Executive Summary of the KPMG Value for Money Audit Report regarding WSIB Adjudication & Claims Administration (ACA) Program has recently been made public. 

While the scope of the Audit primarily pertains to issues affecting Schedule 1 Employers, there are a number of observations that equally pertain to the entire employer community.

• Over 87% of eligibility decisions are made within 14 days of claim registration compared to  approximately 65% in 2008;
• Improved work reintegration efforts resulted in a reduction of the proportion of claims requiring full loss of earnings (LOE) benefits at lock-in from 42% in 2009 to 30% in 2010;
• Three (3) injury types (low backs, shoulders and fractures) contribute to 50% of total claim costs and result in poorer recovery and return to work outcomes;
• The average cost of a low back claim not resulting in permanent impairment is $5,800 whereas the average cost of a low back injury resulting in impermanent impairment is $310,000. The WSIB has been less successful in managing these more complex, long duration claims;
• Ontario grants a higher proportion of non-economic loss (NEL) awards than its peer organizations and the legislative lock-in provisions are contrary to leading practice, with return to work often becoming a secondary objective while securing long term benefits has become a primary objective;
• The lack of a “high risk” claims management process contributes to delays in adjudication, decision making, extended claim durations and increased benefit liabilities for complex claims;
• The current “policy suite” introduces significant complexity around issues of eligibility and limits the ability of the WSIB to bring resolution to a claim in a timely fashion, as it provides multiple avenues for reconsideration and/or appeal of decisions and/or reactivation of claims;
• An aging workforce has contributed to the expansion of eligibility, potentially beyond the scope envisaged by legislation;
• WSIB information systems lack the capability to increase the administrative efficiency of the claim administration process.

As to whether the WSIB’s agreement with the majority of the recommendations made in the Value for Money Audit to address these and other observations made…only time will tell!

KPMG VALUE FOR MONEY AUDIT –

Impact on Schedule 1 Employers 

Perhaps the most striking (and alarming) observations are those relating to the Second Injury and Enhancement Fund (SIEF). 

The report suggests that improved return to work (RTW) outcomes are the result of the reduction in SIEF cost relief granted to employers. However, the authors of the report fail to consider that the mandatory re-employment provisions of the Workplace Safety and Insurance Act, 1997 and/or the recent initiative regarding return to work by use of Work Transition Specialists might just have been the cause of improved RTW outcomes.

Equally disturbing is Recommendation #7 stating “WSIB should immediately address the following policies negatively impacting on return to work and recovery outcomes”; the top of the list being SIEF. The WSIB Management “agrees with the recommendation” and states that these policies will be included in the policy priorities for 2011/2012.

It would appear, however, that the WSIB had already conducted its “review” of the SIEF policy by way of implementation of the SIEF Adjudication units implementing the suggestions contained in the Morneau-Sobeco Report that SIEF relief be limited to 50% and only applied where there has been a pre-existing disability, as opposed to a “condition” which is how the policy presently reads.

That, coupled with the already-extended experience rating window to four (4) years under NEER commencing with 2008 claims, appears to have anticipated the recommendations contained in the KPMG report.

The good news is that the WSIB’s New Service Delivery Model (NSDM), or rather their adjudicative ‘tightening of the belt’, appears to have had some effect on decreasing the free-flow of benefits.  The VFM report supports the adjudication direction, but warns that it should not be at the expense of overzealous budget cutting.  Fair commentary!

Complaint to Fair Practices

RE: SIEF Cost Relief

Given the lack of communication and transparency by the WSIB establishment of the WSIB’s Second Injury and Enhancement Fund (SIEF) Adjudication Teams near the end of 2009 and the absence of any accompanying consultation, policy papers or administrative guidelines, CompClaim has recently submitted a request to the Fair Practices Commission to endeavour to emphasize and prioritize employer concerns about this “initiative” by the WSIB.

Additional concerns revolve around the failure of the WSIB to properly investigate a worker’s medical background in order to reach a proper determination as to whether entitlement should be limited to an aggravation basis and whether any determinations of a Non-Economic Loss (NEL) benefit should be reduced. It is also highly suspect and troubling that not any worker’s ever appear to have had a “minor accident” for the purposes of SIEF Adjudication.

The Board strategy to reduce the cost relief available to employers has recently escalated to participating in employer SIEF appeals at the Workplace Safety and Appeals Tribunal (WSIAT); participation on what is ostensibly an “amicus curiae” (friend of the court) basis. What has really transpired is that the WSIB is participating in employer SIEF appeals as an actual party and making submissions on the actual merits, rather than just explaining policy and clarifying the record of what took place at the WSIB prior to the WSIAT appeal.

KPMG VALUE FOR MONEY AUDIT OF

THE WSIB’S SERVICE DELIVERY

An Executive Summary of the KPMG Value for Money Audit Report regarding WSIB Adjudication & Claims Administration (ACA) Program has recently been made public. 

While the scope of the Audit primarily pertains to issues affecting Schedule 1 Employers, there are a number of observations that equally pertain to Schedule 2 Employers.

• Over 87% of eligibility decisions are made within 14 days of claim registration compared to  approximately 65% in 2008;
• Improved work reintegration efforts resulted in a reduction of the proportion of claims requiring full loss of earnings (LOE) benefits at lock-in from 42% in 2009 to 30% in 2010;
• Three (3) injury types (low backs, shoulders and fractures) contribute to 50% of total claim costs and result in poorer recovery and return to work outcomes;
• The average cost of a low back claim not resulting in permanent impairment is $5,800 whereas the average cost of a low back injury resulting in impermanent impairment is $310,000. The WSIB has been less successful in managing these more complex, long duration claims;
• Ontario grants a higher proportion of non-economic loss (NEL) awards than its peer organizations and the legislative lock-in provisions are contrary to leading practice, with return to work often becoming a secondary objective while securing long term benefits has become a primary objective;
• The lack of a “high risk” claims management process contributes to delays in adjudication, decision making, extended claim durations and increased benefit liabilities for complex claims;
• The current “policy suite” introduces significant complexity around issues of eligibility and limits the ability of the WSIB to bring resolution to a claim in a timely fashion, as it provides multiple avenues for reconsideration and/or appeal of decisions and/or reactivation of claims;
• An aging workforce has contributed to the expansion of eligibility, potentially beyond the scope envisaged by legislation;
• WSIB information systems lack the capability to increase the administrative efficiency of the claim administration process.

As to whether the WSIB’s agreement with the majority of the recommendations made in the Value for Money Audit to address these and other observations made…only time will tell!