Workers compensation

Question 1

Briefly describe what is a Worker’s compensation program and what it covers

Answer 1

WC system is no-fault insurance
• Injured employee is guaranteed benefits for injury, disease, or death arising out of and in the course of employment
• In exchange, employee forfeits the right to sue the employer for negligence
• Employee has a choice of taking action against other 3rd parties for negligence/claiming WC benefits. If WC benefits claimed, WC board obtains subrogation rights

Question 2

Briefly describe how the Workers Compensation program is financed

Answer 2

By contribution of employers only (contribution of employees not permitted)
• Which vary based on the risk of each industry
• That can be adjusted based on employer’s xp

Question 3

Briefly discuss the eligibility of the Worker’s compensation coverage

Answer 3

Mandatory for all employees in industrial occupations

Question 4

Contrast Individual Liability and Collective Liability as assessment basis for a WC program

Answer 4

Individual Liability:
• Each employer is self-insured, or individually liable for costs as they occur
• Used by govt, public agencies

Collective Liability:
• Employers are divided into classes/activity having similar risk
• Assessment rates are determined based on the cost xp of the group

Question 5

Contrast the Common types of experience rating program

Answer 5

• Retrospective: At the end of the year, if there were claims, premium is adj upwards/downwards
• Prospective: Premium is adj based on previous experience

Question 6

Explain if WC is taxed

Answer 6

• Employers’ contributions are tax deductible but not a taxable benefit to employees
• Payments to employees are not taxed

Question 7

Provide and briefly discuss the Types of Workers Compensation Broad Categories

Answer 7

• Health care: Medical expenses incurred
• Short-term disability: Payable until employee able to return to the pre-accident level
• Long-term disability
• Rehabilitation: Facilitate return to work
• Survivor benefits

Question 8

Briefly discuss the WC Long-term disability

Answer 8

First approach: Injuries are classified as total/partial
• Prior to implement dual award
• Benefits linked to nature and extent of injury

Second approach: Dual award
• Monthly benefits based on earnings loss (usually 90% of net earnings), paid until age 65
• Lump sum for noneconomic impact
• Reduction for Actual post-accident earning, CPP disability, Other sources of income

***Benefits adj for cost-of-living increases

Question 9

Briefly discuss the WC Survivor benefits

Answer 9

• If an employee dies as a result of a workplace injury or disease, all jurisdictions provide survivor benefits, a lump-sum benefit for burial expenses and a certain amount for transportation of the body
• Benefits to spouse range from a relatively short term pension with a larger lump sum to benefits payable to age 65 or for life with/without a smaller lump sum
• Children: Terminates at age 18, extended if disabled or in school