Experts discuss premium rates and the factors that come into consideration for employers
Saskatchewan’s Workers’ Compensation Board (WCB) has provided insight into how premium rates and experience rating adjustments are determined, highlighting the financial incentives for employers who maintain strong workplace safety programs.
WCB Saskatchewan’s funding system is employer-driven and must fully cover expected claim costs each year.
Determining premium rates begins with an analysis of historical injury patterns and employer payrolls, says Thomas Webb, director in charge of Actuarial Services, WCB Saskatchewan.
“The way we do that is we start by looking at the big picture. We start by looking at our historical injury patterns as well as employer payrolls, to determine the overall premium rate that needs to be charged to employers to fund the system. And then from there, we go down a layer and talk about the industry level.”
Employers are classified into 50 industry codes, each with its own risk profile.
The base premium rate for 2025 is set at $1.28 per $100 of assessable payroll, but actual rates vary depending on an industry’s risk level. Premiums fluctuate based on industry-wide claim costs, ensuring high-risk industries contribute more, he says.
Experience rating system
Once industry rates are established, the experience rating program adjusts individual employer rates based on their specific claim cost history. As a result, employers within the same industry classification do not all pay the same rate.
Webb says that this process is designed to ensure fairness, rewarding safer employers and requiring those with higher claim costs to contribute more.
WCB also uses the experience rating system to determine whether an employer qualifies for a discount or surcharge, depending on their claim cost history over a three-year period, says Gabrielle Klass, director of employer services in charge of Senior Management Revenue & Employer Accounts.
"Anybody that's in a school division classification code will start off at the same level… but each employer is going to get a different size slice of that pie. Because we know we need to collect so much money, but we want to slice it up… to say, you had a poor experience, so you're going to pay a little bit more into the fund because you've used the fund more," she says.
Employers in the experience rating program participate in either the standard program or advanced program based on their premiums paid over a three-year period, according to WCB Saskatchewan.
Calculating premium discounts
According to recent reports, the Prairie South School Division (PSSD) received a $67,726 discount on its premiums, reducing its total cost to $164,478 from a base premium of $232,204. That’s the case even though the division reported a 21 per cent increase in employee injury claims during the 2023-24 school year, noted Moose Jaw Today.
WCB accepted 17 injury claims from the division in 2024, up from 14 the previous year. These injuries resulted in 609 time-loss days, an increase from 312 in 2023. Costs for compensation and medical expenses rose to $131,436 from $123,543, Moose Jaw Today reported, citing a human resources accountability report at PSSD.
The evaluation for 2025 premium rates is based on employer data from 2021, 2022, and 2023, with 2024 data excluded due to its incompleteness, Klass explains.
Discounts and surcharges are calculated at the end of each year after the annual industry premium rates have been approved.
Klass clarifies that claim costs – not just the number of claims – determine rate adjustments.
"The number of claims doesn't necessarily factor into our calculations. It's based on the cost of those claims. So you could have an example where an employer has a lot of really small claims that don't amount to much in a cost perspective," she explained.
Employers could see a rise in injury frequency but still qualify for a discount if costs remain low through effective return-to-work programs that reduce lost wages and rehabilitation expenses.
Webb adds that experience rating is relative to industry performance.
"It may be the fact that other employers within the industry have had an even larger increase in costs. And so you could have a situation where, even though costs are rising, a particular firm may be still outperforming the rest of the firms in their industry… and that would enable them to earn a discount because of the mechanics of the formula."
Employer strategies for lower premiums
Klass and Webb emphasize that reducing claim costs through safety programs and return-to-work initiatives is the most effective way to control premiums.
"The experience rate program is designed to be an incentive to employers to focus on safety, and the best way to do that is put in good return-to-work programs, prevent injuries as much as possible," Klass says.
“We have a really strong fatalities and serious injuries strategy to really focus in on some of those key areas that we know can help drive some of that overall province result. But everybody has a part to play in safety.”
Webb states that long-term cost stability is a key priority for WCB, reinforcing the importance of workplace safety.
"Preventing those injuries is the best way to prevent increasing costs over the long term."
