Morneau - Workers' Compensation

  1. System description
    no-fault insurance: employee is guaranteed benefits for injury, disease or death arising out of and in the course of employment in exchange for forfeiture of right to sue employer for negligence
  2. Eligibility
    • mandatory for all employees in industrial occupations
    • in some provinces, knowledge industry, domestic and casual employees are exempt
    • sole proprietors and executive officers are not subject to mandatory coverage; encouraged to seek voluntary coverage in private sector to get benefits commensurate with earnings
  3. Funding (Assessment Basis)
    • funded solely by assessment paid by covered employers
    • contribution by employees are not permitted
  4. Individual vs collective liability
    • individual liability: used for government or public agencies; each employer is self-insured (individually liable) for accident and sickness costs as they occur
    • collective liability: employers are divided into industry classes and/or rate groups according to similar business activity and inherent accident and hazard risks; most jurisdictions offer experience rating programs (prospective or retrospective)
  5. Assessment rates for collective liability covers:
    • expected current and future benefit costs of new claims
    • administration expenses, cost of accident, prevention programs/agencies
    • adjustments to meet funding requirements established by policy or legislation
  6. Advantages of experience rating
    • manages accident costs
    • encourages participation in accident prevention and return-to-work initiatives
  7. 5 categories of WC benefits
    • health care: hospital, medical, drug, ancillary services (transportation, clothing, …)
    • short-term disability: 75-90% of net earnings until return to occupation or earning lvl
    • long-term disability: dual award consists of a monthly benefit based on earnings (until 65) and a lump-sum payment for non-economic impacts of the permanent impairment; other method involves classifying permanent injuries in permanent vs partial, and monthly benefit is paid based on percentage of gross earnings.
    • rehabilitation: facilitate return to work (relocation assistance, ergonomic modifications)
    • survivor: pension plus lump-sum to cover burial expenses and transportation of body
  8. Taxation
    • employer contribution is a tax-deductible operating expense
    • employer contribution is not a taxable benefit for employees
    • payment to injured employees are not subject to tax
Card Set
Morneau - Workers' Compensation