1. 1 NEER & MAP Overview & Financial Impacts Prevention Division Phone: (416) 344-1016 Toll Free: 1-800-663-6639 FAX: (416) 344-3493 Web site: www.wsib.on.ca HCHSA Safety Group 2005

2. 2 Experience Rating What is it? Modifies an employer’s premium based on accident experience Through refunds/surcharges (NEER) or rate group premium rate adjustments (MAP) Purpose? Encourage employers to promote workplace health and safety

3. 3 How MAP Works 1994

4. 4 MAP Table of Adjustments Average Premiums 1,000-1,499 1,500-1,999 2,000-2,499 2,500-4,999 5,000-9,999 10,000-14,999 15,000-19,999 20,000-25,000 0 Claims -5% -6% -7% -8% -10% 1 Claim 0% -5% 2 Claims +8% +7% +6% +5% +3% 0% 3 Claims +20% +19% +17% +15% +13% +11% +8% +5% 4 Claims +40% +38% +34% +30% +26% +22% +16% +11% 5 Claims +50% +44% +38% +30% +22% 6 Claims +50% +46% +35% 7 + Claims +50% An additional 10% increase applied for each claim with costs > $5,000 An additional 25% increase applied for fatalities Maximum increase is 50%

5. 5 How NEER Works Pooling Charge Unfunded Liability (Retired by 2014) NEER Insurance Pooling Charge (LLOD / Claim Limits / Firm Limits / SIEF) Overhead (WSIB/MOL/SWA/LEG.) Expected Cost of New Claims Components of Gross Premium Rate Projected Future Cost (Reserves) Benefit Payments to Date NEER Insurance Pooling Charge (LLOD / Claim Limits / Firm Limits / SIEF) NEER Expected Claim Cost Organizations Actual Claim Cost = Refund $ or Surcharge $ NEER Actual Claim Cost Compared Overhead (WSIB/MOL/SWA/LEG.) Rating Factor Surplus (EC>AC) or Deficit (EC<AC) X

6. 6 2002 Accident Year 200320042005 1 st review 2 nd review 3rd Final review 3 rd qtr NEER Three-Year Review Projected Costs Actual Claims Costs

7. 7 Injury Date: May 1, 2004 Weekly Benefits: $500 Overhead Factor 47% Past Awards to: 30Sep05 NEER Return-to-Work Examples

8. A Financial Business Case for Health & Safety in Ontario Workplaces A Simple Costing Tool using your NEER Statement

9. 9 Part 1: Calculating the Financial Business Case for Health & Safety Using NEER Information

10. 10 300,000 Cost Sheet 1: Maximum Rebate Acc. Year Premiums ($) Exp. Cost Factor (%) Expected Costs ($) NEER Costs ($) Rating Factor (%) Perf. Index 2001 550,00043.13 237,215300,300 64.48 1.27 1. Expected Costs: 2. Rating Factor: 3. Max. Potential Rebate: $237,215.00 64.48 % $152,956.23

11. 11 300,000 Cost Sheet 2: Actual Rebate/Surcharge 4. NEER Costs: 5. Expected Costs: 6. Difference: X Rating Factor: 7. Rebate/Surcharge: $237,215.00 64.48 % $40,677.21 DR $300,300.00 $63,085.00 300,000 Acc. Year Premiums ($) Exp. Cost Factor (%) Expected Costs ($) NEER Costs ($) Rating Factor (%) Perf. Index 2001 550,00043.13 237,215 64.48 1.07300,300

12. 12 Cost Sheet 3: Unrecovered Rebate and Surcharge Per Claim 8. Unrecovered Rebate and Surcharge (Line 3 + Line 7): 9. Average Unrecovered Rebate and Surcharge Per Claim: $152,956.23 CR $40,677.21 DR Line 3: Line 7: Line 8: $193,633.44 DR Unrecovered Rebate (Line 8) ÷ No. of Claims = _______________ $193,633.44 $12,908.90 ÷ 15 Max Rebate Actual Unrecovered

13. 13 Cost Sheet 4: Determining Gross Sales Required to Recover NEER Costs 10. Unrecovered Rebate (Line 8): 11. Company Profit Margin: 12. Gross Sales Required: (Line 10 ÷ Line 11): $193,633.44 6 % $3,227,224.00

14. 14 Part 2: Calculating the Financial Business Case for Health & Safety Using Total Costs of Injuries (NEER Information & Company Information on Direct/Indirect Costs of Injuries)

15. 15 Cost Sheet 5: Determining Approx. Total Cost Per Injury/Illness 13. Unrecovered Rebate (Line 8): $193,633.44 14. Determine Direct/Indirect Costs: 15. Add Line 13 and Line 14: 16. Determine No. of Claims: 17. Divide Line 15 by # of Claims: = Approx. Total Cost per claim 15 $882,825.00 $1,076,458.44 $71,763.90

16. 16 Cost Sheet 6: Determining Gross Sales Required To Recover From Overall Costs of Claims 18. Overall Costs (Line 15): 20. Gross Sales Required (Line 18 ÷ Line 19) 19. Company Profit Margin: 6% $1,076,458.44 $17,940,974.00

17. 17 Web site: www.wsib.on.ca NEER Cost Tool Where? Prevention - Incentives and Training - New Experimental Experience Rating (NEER) Program - NEER Cost Tool Map Cost Tool Where? Prevention - Incentives and Training - Merit Adjusted Premium (MAP) plan for small business - MAP Cost Tool How much do workplace injuries cost? (NEER) Where? Prevention - Incentives and Training - New Experimental Experience Rating (NEER) Program - NEER Cost Fact Sheets

18. 18 Reminders Questions? Call 1-800-663-6639 or (416) 344-1016 Drive Safe, Work Safe, Play Safe Be Safe!