WSBC Claims Costs Mitigation & Experience Rated Assessment System (ERA) Presented by William (Bill) Haig ManageAbility.ca

Overview Experience Rating Assessment system (what is it?) Classification Unit Claims Management impact on Victoria Regional Transit System (VRTS) ERA What’s possible – Province of BC Claims & Case Management activities –case examples

HOW THE ERA PLAN WORKS Decreasing Claims Costs Increasing $1.06 per $100 payroll $4.24 per $100 payroll $2.12 per $100 payroll $50,000 $100,000$200,000 Assessments paid

The ER Plan Rate year Year Weighted Window for Costs = 42 Claims months 16.7%33.3%50% Calculation Year 2011 Claims costs to June 30

Classification Unit Bus Line, Chartered Bus Tours, or HandyDART Services Classification Payroll - $521,000,000 (2009) Victoria Regional Transit System payroll $ 48,000,000 (9.2% of classification) Regions are approximately the same size as VRTS: Therefore, by extension: Transit Regions + VRTS make up approximately 20% of the classification payroll Transit Regions + VRTS make up approximately 20% of the classification payroll payroll estimate $100,000,000 payroll estimate $100,000,000 Base Rate for 2011 =$2.12 Base Rate for 2011 =$2.12 Assuming average performance by Transit Regions + Victoria – paying WSBC ~$2.0 million

Impact of Claims Management on ERA rate for Victoria Regional Transit System ERA savings of approximately $150,000 in assessment costs for VRTS + base rate mitigation (all employer’s costs in class contribute to base rate)

Projection to Regional Operations Based on conservative projection of $0.30 off the ERA rate: Opportunity for other Transit Related Operations: $150,000 per annum from assessments + Positive impact on base rate (base rate consists of claims costs from all class members)

Provincial Government Claims Management (or what’s possible ) 50% reduction in claims costs over 5 year period Cumulative savings of over $16 million for Province over last 3 years Using exactly the same claims management methodology Recall premiums paid to WSBC ~$2 million per year 50% reduction = ~$1.0 million less in premiums for VRTS + Regions

Claims & Case Management Activities Overview What we did over the course of the last year (March 2010 thru March 2011) 4-part strategy Ongoing review of all claims – claims management & employer appeal (as required), case management planning Cost-Relief review Appeals representation (responding to employee appeals) Claims/Case Management training Developed a claims management training package for supervisors

Ongoing review of all claims Initially – review all claims to ensure that the Board Makes correct decision regarding initial claim acceptance (influence decision at outset) Is aware of employer’s ‘take’ on claim When incorrect decision is made by Board- pursue employer appeal

Employer Appeal Example Actual Case Scenario Worker reported minor incident (hyperextension of knee) WSBC contacted employer in 5 months later critical that no employer report submitted (WSBC was told that employer had no knowledge of incident). No report by employee to employer until asked to do so 5 months laer WSBC accepted claim despite delayed reporting, employer objection and discussions WSBC accepted need for MRI, further investigation, some time loss ongoing Claim had potential for permanent disability (PFI) – significant employer costs Employer appeal initiated – employer did not accept WSBC decision Outcome –WSBC decision to accept overturned – employer correctly avoided significant costs, time loss etc including significant, permanent disability award that would conservatively result in pension reserve of $30,000 to $35,000 and (unquantifiable) future costs

Ongoing claims review Assist management staff in developing: An initial claims management strategy, including a disability management plan and; Work with WSBC case managers and vocational rehabilitation consultants to ensure: WSBC is managing the case appropriately Effective disability management/return to work plan is in place or being developed

Case Management Example 2009 Claim Significant injury – lengthy (real) disability from operating bus WSBC accepted injuries caused permanent restriction from regular occupation Case Management Early in claim cycle, identified suitable alternate work (temporary) while awaiting recovery– approx 10 months of costs avoided ( $35K) Later, permanent restrictions identified that precluded return to regular occuatpion Working closely with WSBC Vocational Rehabilitation Consultant, permanent alternate work was identified (a lot of team effort) Fulfilled employer’s duty to accommodate (Human Rights) Avoided approximately 1 year of Vocational Rehabilitation costs (approx $35 k) Likely avoided partial loss of earnings pension ($ significant – hard to quantify in this case) Positive impact on 2011 rates (due to costs avoided prior to July )

Cost-Relief When a pre-existing disability, disease or condition enhances the disability under the claim, the employer can be ‘relieved’ of the claims costs (S.39(1)(e)) Ongoing claims management – influence the Board Case Manager to apply cost-relief Appeal all decisions to deny cost-relief (you never know what you will find) Cost-relief, if applied, does not impact employee benefits in any way

Cost Relief Example Scenario claim – appeal overturned initial Board decision to deny claim Significant time loss in 2009, return to work, then ongoing disability from August 2010 (and ongoing) – WCAT accepted claim Subsequent to the claim being accepted on appeal, but prior to decision being made, contact was initiated with the WSBC case manager to provide info about employer knowledge of prior (non-work related) back problems Highlighted that employer was attending to the decision on cost relief Influenced case manager to investigate prior evidence closely Avoided necessity of spending time appealing decision 100% cost-relief - $25, saved Other example – after file disclosure (due to appeal when cost relief denied) clear evidence of pre-existing on file – but apparently overlooked – success at appeal (resulted in adjustment to 2011 rate (money back)

Responding to employee appeals Respondent Representation When an employee appeals, the employer can participate in the appeal Ensures the employer’s interests are protected Allows employer to present evidence/argument related to the claim Contributes to the integrity of the system – when employer participates better outcomes result

Summary of Cases Recall the 3 year claims cost window (42 month costs applied to the ERA calculation) Our claims and case management activity resulted in savings against the ERA: 2010$ 73, $111, *$395, Which will knock $.28 off the 2012 rate (plus impact on the 2010 rate) $144,000 (as of April 1, – more to come for 2012 rate year)

Questions Presented by William (Bill) Haig Claims Consultant