Alberta employers should maintain health benefits, reinstate injured workers: Report
Employees off work receiving workers’ compensation benefits should continue to be covered under their employer’s benefits plan. And, when they are ready to go back to work, their employer should be obligated to reinstate them.
These are two of the payroll-related changes that a panel reviewing Alberta’s workers’ compensation system recently recommended to the provincial government.
The government appointed the three-member panel last year to study the workers’ compensation system in the province. It is the first major review of the system in more than 15 years.
In its final report, which the government released in July, the panel put forward 60 recommendations covering a variety of issues, including governance of the Workers’ Compensation Board (WCB), the service it provides, wage-loss benefits, health care, return-to-work initiatives, employer assessment rates, and appeals of WCB decisions.
Labour Minister Christina Gray said the government would review the report, called Working Together: Report and Recommendations of the Alberta Workers’ Compensation Board (WCB) Review Panel, before announcing any changes to legislation.
The report said the system requires widespread changes to shift the focus from managing claims to looking after the health and well-being of workers.
“This should be the focus around which the system’s policies, processes and decisions are made,” the report said.
It added that workers, employers and other stakeholders would benefit from changes that would make workers’ compensation fairer, more cost-effective and transparent.
A legislative requirement for employers to reinstate workers injured or made ill on the job would be one way to make the system more worker-centred, the report recommended.
Although statistics show that 93.7 per cent of workers whose claims were closed in 2016 returned to work with their employer, the report said the numbers do not tell the whole story.
“For example, it is an open question as to how long these workers were retained by their employers after they returned,” it said. “These statistics also do not tell us how many workers were re-engaged at their employers in ways that meaningfully made use of their capacities, nor do they indicate whether the employer faced resource challenges in bringing the workers back to their workplaces.”
During consultations, the Alberta Federation of Labour (AFL) told the panel that without mandatory reinstatement, workers face significant financial difficulties if their employer does not re-hire them.
“Anecdotally, worker advocates report that some employers refuse to re-employ injured workers when they are ready to return to work,” said the AFL. “These workers may be able to pursue remedy through the human rights system, but this is a slow process and, in the interim, the WCB normally reduces or terminates their wage-loss benefits via deeming.”
However, business groups, such as the Canadian Association of Petroleum Producers, questioned the need for a reinstatement requirement, saying: “If an employee believes they are not being accommodated, the appropriate remedy is under human rights legislation.”
In its report, the panel recommended that a return-to-work obligation be limited to employers of a certain size (it did not specify the size), with small employers possibly exempted.
It also suggested that the requirement apply to employers for 24 months after an accident or illness. To fulfill the obligation, employers should have to employ the workers for at least a year after they returned.
Continuing coverage under an employer’s health benefits plan (dental, vision care) would be another way to alleviate workers’ financial worries, the report recommended.
The recommended length of time for maintaining benefits would depend on whether the government implemented the return-to-work recommendation, the report said.
If there was an obligation to reinstate workers, the report said health benefits coverage should continue through the period employees are off and then return to work.
If there is no obligation to re-employ the workers, the report said employers should have to maintain benefits for one year from the date of the illness or accident. This would be similar to a requirement in Ontario.
Looking at benefits and employer assessments, the panel advised the WCB continue using a maximum insurable earnings ceiling when calculating wage-loss benefits for injured workers and employer premiums.
Labour groups had called for the government to eliminate the ceiling and base benefits and premiums on workers’ full gross earnings.
To address concerns about injured workers whose earnings are higher than the maximum, the report suggested that the government implement an additional special graduated benefit.
“This additional benefit would increase the worker’s total WCB benefit for a period of time and help compensate for wage losses in excess of those covered by typical WCB benefits under the maximum insurable earnings cap,” the report said.
The report also touched on the WCB’s practice of distributing surpluses from its accident fund to employers when the fund exceeds its target range.
Every employer registered with the WCB pays premiums into the accident fund for workers’ compensation coverage. The board uses the fund to pay current and future workers’ compensation claims costs.
The board also invests the funds in financial markets, with a policy of keeping the fund’s assets between 114 per cent and 128 per cent of total liabilities. If the fund falls short, the WCB collects additional amounts from employers. If it exceeds the target range, the WCB can choose to return some of the surplus to employers.
The report called for an end to distributing the surplus, saying it was not an appropriate use of the money.
“Under the current practice there is no way to ensure that the distributed money will be used for workers’ compensation purposes. It flows to employers with ‘no strings attached,’” it said.
The report recommended that the money only be used to support the workers’ compensation system, keeping the surplus in the fund to pay for future claims or to help offset increases in employer assessments that may result from implementing the report’s recommendations.
The panel also looked at experience rating programs that the WCB uses to help set employer premium rates. Experience rating enables the board to provide discounts or add surcharges to employers’ premiums based on their individual accident claims history.
During the consultations, the AFL called for the programs to be eliminated. “The purpose of workers’ compensation is to compensate injured workers, not improve workplace safety. There is good evidence that employers respond to experience rating by engaging in claims management behaviours,” it said, adding that this could include suppressing claim reports.
While the panel agreed that there were questions about the effectiveness of experience rating, including whether it discourages accident reporting or actually results in safer workplaces, it was against elimination.
Beyond experience rating, the report said the WCB needs to examine how it sets employer premiums: “There are many questions and concerns swirling around the way in which the WCB calculates assessment rates. Without being able to clearly discern how rates are being set, stakeholders have come to be suspicious that some kind of ‘funny business’ happens behind the scenes. There is an urgent need for openness and clarity, otherwise trust and confidence in the rate-setting process risk being further undermined.”
While the panel said an in-depth examination of the rate-setting process was too complex for the scope of its review, it advised the WCB board of directors to commission an independent study to examine some issues further.
