Reprieve for Employers
The Government of Alberta has recently announced premium relief measures for private sector employers. WCB has since stopped issuing invoices for 2020 premiums. No interest charges will be applied for unpaid 2020 premiums, and clearance letters will remain available to all employers. Furthermore, 2020 premium payments will be refunded, with cheques being issued beginning April 6 to employers who have already made payments. WCB expects to have all cheques sent out by the end of April.
The good news
All private sector employers will have their 2020 WCB premiums deferred to 2021. When invoicing resumes for 2020 premiums in 2021, small and medium-sized private sector employers will have 50% of their 2020 premiums waived. Indeed this is excellent news for struggling business owners.
The not-so-good news
While premium relief is a godsend to the business community, it’s important to understand that claims costs continue to accrue. When 2020 premiums are invoiced in 2021, employers will pay only 50% of 2020’s premiums, but 100% of claims costs are still being charged to their respective experience accounts. Why does this matter? Because, due to COVID, injured workers aren’t receiving normal levels of support. Rehab sessions have been cancelled. Specialist appointments and medical procedures postponed indefinitely. Workers suffering from mental injuries will be enduring an especially hard time. And it’s these complications and delays that cause claim costs to snowball. Worse yet, given WCB’s method of premium calculation, these costs won’t be reflected or captured in 2020’s premiums. Instead, these costs will impact on future premium calculations in the years to come. So it’s a case of kicking the can down the road; premium relief buys companies some breathing room for now, but a tsunami of claims costs gathers on the horizon.
Because periods of disablement are being prolonged due to exceptional circumstances, employers will be in line for cost relief once the crisis abates. Meanwhile, WCB has suspended all in-person services, including assessments, treatments and classroom training. So until the dust settles, employers are more or less forced into a holding pattern until relief can be sought down the road.