Document name

Second Injury and Re-employment Reserve

Document number

POL 03/2021

Cost relief means the process of moving claims costs from an employer’s claim cost experience to a reserve (i.e., collective cost pool shared proportionally among all industry rate codes).

1. The Workers’ Compensation Act, 2013 (the “Act”) authorizes the Workers’ Compensation Board (WCB) to establish the second injury and re-employment reserve. The WCB may set up a reserve(s) to meet losses from any disaster or other circumstance the liability for which would, in the opinion of the WCB, unfairly burden the employers in any class (Section 145).
2. The purpose of the second injury and re-employment reserve (the “reserve”) is to provide employers with cost relief for claims:
   1. Attributed to an earlier work-related injury.
   2. Involving a worker’s pre-existing condition.
3. The reserve is set through the funding policy (POL 14/2017).

Cost relief

1. For the purpose of this policy, partial cost relief means the relief of a portion of the entire costs on a claim, whereas total cost relief means the relief of the entirety of costs on a claim. If a claim is eligible for cost relief, the employer will be relieved of either total or partial claim costs with those costs being charged to the reserve.
2. Cost relief eligibility will be considered on claims for all workers and throughout the life of a claim.
3. If an employer receives cost relief on a claim, a credit will be applied to the employer’s claims costs in the year cost relief was applied (POL 27/2016, Experience Rating Program – Discounts or Surcharges).

Pre-existing conditions

4. The WCB considers a pre-existing condition to be a non-work-related medical, physical or psychological condition that exists prior to a work-related injury. The existence of the condition must be medically confirmed, either pre-injury or post-injury, and may have been evident prior to the occurrence of the work injury or it may become evident afterwards.
   1. If evidence indicates that a work-related injury is attributable solely to the worker’s pre-existing condition (e.g., epilepsy), the WCB will consider charging total claim costs to the reserve. The WCB will only compensate for the work injury (i.e., for the period of disablement resulting from the work injury) and does not assume responsibility for the pre-existing condition.
5. The WCB will charge partial claim costs to the reserve in the following situations:
   1. If recovery from a work injury is prolonged because of an aggravation or acceleration of a worker’s non-work related pre-existing condition (POL 12/2017, Pre-Existing Conditions – Aggravation or Acceleration).
   2. If a prior work injury with another employer:
      1. Prolongs the recovery of a new work injury because a prior work injury is aggravated or accelerated.
      2. Causes a new work injury.
6. An employer will be eligible for partial cost relief if a workplace exposure contributes to a respiratory disease (e.g., asthma, emphysema, lung cancer) and smoking is partially responsible. The WCB will charge 50 per cent of claims costs to the reserve.

Injuries – following a work injury

7. If a compensable secondary injury, disease or condition occurs because of a worker’s initial work injury, the WCB will charge partial claim costs to the reserve.
8. The WCB will charge total claim costs to the reserve if a worker’s prosthetic device, prescribed for a previous work injury, fails and causes an injury. Costs to repair damage to the prosthetic device will not be charged to the reserve.

Injuries - following a return to work

9. If a worker sustains a new injury, the WCB will charge total claim costs for that injury to the reserve if it arises out of and in the course of:
   1. A return-to-work (RTW) plan (POL 08/96, Return-to-Work Plans).
   2. Alternate or accommodated employment, with either the pre-injury or a new employer:
      1. Within one year of starting alternate or accommodated employment., and
      2. To the same area of injury as the work-related injury.

Other

10. The WCB will charge partial claim costs to the reserve in the following situations:
    1. The worker has benefits continued during a notice period while unable to participate in health care or an individualized vocational plan (IVP) (POL 10/2021 Suspension of Benefits).
    2. The worker is incarcerated and benefits are redirected to a dependent spouse (POL 10/2016, Suspension – While Incarcerated). Costs redirected to the dependent spouse during a notice period will be charged to the reserve.
    3. An injury occurs to a worker while traveling to or from treatment or RTW programming, or while undergoing treatment for which WCB is responsible. (POL 04/2011, Injuries – Travelling for or Attending Medical Aid or Return-to-Work Programming).
    4. The worker is entitled to benefits (i.e., medical or wage loss benefits) for a claim involving serious and wilful misconduct (POL 08/2017, Serious and Wilful Misconduct).
    5. The worker sustains an injury because of an imported personal hazard of another worker (POL 07/2021, Arising Out of and In the Course of Employment).
    6. The worker is receiving partial earnings loss benefits and a state of emergency interrupts RTW programming (POL 02/2018, Benefits – Return to Work Interrupted).