Policy
Through the rate setting exercise, WorkSafeNB will ensure that assessment premiums will be sufficient to cover the estimated total revenue requirement for the assessment year.
The objectives are as follows:
- Collective liability for a balanced system that offers both responsiveness and stability;
- Full funding for security of benefits; and
- Accountability for performance.
Interpretation
- The rate setting process begins by establishing the projected total revenue requirement for the upcoming year, to cover the following:
- Full costs of new accidents including all projected future costs for these accidents;
- Direct and indirect administrative costs;
- Contributions to special funds and reserves;
- Costs of any other WorkSafeNB approved activities; and
- Adjustments required to reach WorkSafeNB’s funded ratio goal as outlined in Policy 37-100 long-term Fiscal Strategy.
- The second stage of the rate setting process is to allocate the projected total revenue requirement to rate groups, as per Policy 23-300 Employer Classification, on a basis which reflects historical accident cost experiences.
- WorkSafeNB uses the following information when determining cost experience:
- A five-year exposure period;
- New injury costs up to the maximum per claim cost level for new accidents that occur during the five-year period; and
- Maximum per claim costs for fatalities that occur during the five-year period, regardless of actual costs.
- When determining historical accident cost experience, claims accepted for COVID-19 will not be included from the accident years 2020, 2021, and 2022.
- The maximum per claim cost for rate setting is $155,000 in 2024 and will increase thereafter to two times the average maximum assessable earnings over the exposure period
rounded to the nearest $10,000, if higher. For more information on the maximum assessable
earnings, please see Policy 37-110 New Brunswick Industrial Aggregate Earnings.
- Where an industry is reclassified to a different industry group or rate group:
- The maximum increase in any year will be the greater of 20% in addition to the annual percentage change in the provincial average assessment rate or $0.20 per $100 of assessable payroll;
- The maximum decrease in any year will be the greater of 20% in addition to the percentage change in the provisional average assessment rate or $0.20 per $100 of assessable payroll.
From time-to-time WorkSafeNB adopts new NAICS codes, which could result in an employer being reclassified to a different industry. In this instance, the above transition limits may apply. In all other instances, transition limits are not applicable when an employer is reclassified to a different industry.
- A minimum assessment rate is established, which is the lowest basic rate that may be
applied to the lowest risk rate group. WorkSafeNB calculates this rate each year
based on minimum administration costs, plus a fair share of overall cost of claims.
- When an employer’s calculated assessment premium is below $150, the employer must pay
the $150 minimum premium.
Previous versions
- Policy 23-600 Setting Basic Assessment Rates, release 4, effective August 10, 2022
- Policy 23-600 Setting Basic Assessment Rates, release 3, effective January 31, 2013
- Policy 23-600 Setting Basic Assessment Rates, release 2, effective September 12, 2008
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.
Exposure period - for the purpose of this policy, it is a period of time containing the data used for setting basic assessment rates.
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-related costs arising as a result of an accident that arose in the course of employment that occurred within the exposure period. Costs associated with accidents that occurred outside the exposure period are not included.
North American Industry Classification System (NAICS) - a common framework for the production of comparable industry statistics by the statistical agencies of Canada, Mexico, and the United States. As a reference manual, the NAICS provides a classification structure including definitions and examples of activities for each industry.
