WCB provides premium relief to support economic recovery
Regina, Sask., Oct. 29, 2020 – On Oct. 28, the Saskatchewan Workers’ Compensation Board (WCB) announced there will be a board level hold on the 2021 average employer premium rate. Because of the economic impacts of the ongoing COVID-19 pandemic, the WCB is proposing to hold its 2021 preliminary average premium rate at $1.17 per hundred dollars of payroll – the same rate as 2020. The announcement was made Oct. 28 at the WCB’s annual preliminary rate information meeting teleconference with Saskatchewan employers, workers and stakeholders.
“The two key drivers of the premium rate are claims costs and payroll. Claims costs are historically on the rise and, due to COVID-19 in 2020, payroll is down in Saskatchewan, similar to most other provinces,” said the WCB’s CEO Phil Germain. “With certain industries, employers and workers dealing with the financial stress associated with COVID-19, the board has looked at how to help employers manage the ongoing impact of the COVID-19 pandemic and keep this economy moving forward. To do this, we are proposing to hold the 2021 average rate.”
Under the WCB’s rate model, the WCB calculated the 2021 average preliminary required rate to be $1.23 per hundred dollars of payroll without the board level hold. The increase is partially because of the economic slowdown caused by COVID-19 and an increase in compensation and health-care costs. Given the level of uncertainty surrounding the future of the pandemic, the WCB is proposing a hold for 2021 and won’t pass those costs onto employers. By holding the rate at $1.17, the WCB will save employers approximately $13.4 million in 2021 premiums. The premiums collected are not expected to cover estimated costs in 2021, which will result in a loss from operations and reduce the Injury Fund. “The 2021 hold on the average premium rate is temporary and employers should expect rate increases in the future, as early as 2022,” said Germain. “Projecting payroll and costs for 2021 was challenging. The forecasting process developed post-pandemic projections based on pre-pandemic experiences. The board is financially sound to absorb the cost increases in 2021, but cannot continue this practice in future years.”