Document name

Disaster Reserve

Document number

PRO 07/2022

1. POL 07/2022 establishes the Disaster Reserve to provide claims cost relief when a work-related disaster has occurred that may unfairly burden employers. Through policy, the WCB board has delegated responsibility for determining when a circumstance may be considered a disaster to WCB’s disaster reserve review committee.
2. The following procedure details the guidelines followed when determining if claims costs will be charged to the Disaster Reserve

1. All injury claims costs are initially charged to the cost experience of the injury employer, unless cost relief is granted immediately upon claim acceptance. 
2. Does WCB provide cost relief for an employer if a situation could be considered an exceptional circumstance?
   1. The WCB may provide cost relief to an employer, or a group of employers, from the Disaster Reserve through two processes:
      1. If an injury claim’s costs reach a specific threshold related to the maximum wage rate, or
      2. The WCB’s disaster reserve review committee determines a work-related event is a disaster 
      3. The WCB’s disaster reserve review committee determines a work-related event is a disaster and costs would unfairly burden an employer or group of employers.

Disaster Reserve Threshold

3. When would an employer automatically receive cost relief from the Disaster Reserve?
   1.  An employer will automatically receive partial claims cost relief from the Disaster Reserve when:
      1. One injury claim’s costs exceeds 10 times the maximum wage rate at the time of injury, or
      2. One work-related incident results in injury to two or more workers of the same employer and claims costs exceeds 20 times the maximum wage rate at the time of injury.
4. If an injury claim’s cost is eligible, what amount is provided cost relief?
   1. The portion of claim costs that exceed the thresholds will be transferred to the Disaster Reserve.
   2. When the calculation under Point 3(a)(ii) is not considered of sufficient benefit to an employer, the WCB will consider cost relief for the individual claims.

Unfair burden - disaster reserve review committee

5. Could an employer, or group of employers, request cost relief from the Disaster Reserve?
   1. If an exceptional circumstance or event caused work-related injuries that would be considered a disaster and would unfairly burden an employer, a group of employers or an industry premium rate group, but does not, or will not, meet the automatic cost thresholds, the disaster reserve review committee will determine if cost relief should be applied.
6. Requests to review for cost relief from the Disaster Reserve must be submitted to the disaster reserve review committee for consideration.
   1. Requests may be submitted to the committee by an employer, a group of employers or any WCB department or staff.
   2. Requests must be in writing and contain supporting information explaining how the injuries or injury event would be considered an exceptional circumstance or disaster that would unfairly burden an employer or group of employers and that may warrant cost relief, in accordance with POL 07/2022, Disaster Reserve.
   3. In unique situations, the disaster reserve review committee may initiate consideration for cost relief from the Disaster Reserve when it is made aware of a disaster that may unfairly burden on employer(s). 
7. Requests to the disaster reserve review committee will only be considered after cost relief eligibility has been reviewed by Operations staff under:
   1. Third party recovery.
   2. Second injury and re-employment reserve.
   3. Occupational disease reserve.
8. What factors does the disaster reserve review committee consider when reviewing requests?
   1. The committee will consider cost relief from the Disaster Reserve in exceptional circumstances considering the following factors (but not limited to):
      1. The nature and scope of the disaster:
         1. How severe was the incident or event?
         2.  How many workers were injured?
         3. How many employers are affected?
         4. How many industry premium rate groups are affected?
         5. Was the event considered major, sudden and unexpected?
         6. Did the injuries result from a natural catastrophe?
      2. Financial impacts:
         1. Effects the claim(s) or the circumstances may have on the employer’s, or group of employers’, experience rate or the industry premium rate.
         2. Does the situation and resulting claims costs impose disadvantages other employers would not face in similar circumstances?
         3. Is the impact outside the scope of what was reasonably anticipated in the design of the rate setting model and the experience rating program?
         4. Would cost relief affect WCB’s funding percentage and responsibility to finance its activities and all obligations under the Act?
         5. Have the potential claims costs been compared to the employer premiums to determine the impact, or potential impact due to the number of claims (e.g., impact to a standard employer’s experience rating)?
      3. Other considerations:
         1. Has the employer taken all reasonable steps to prevent the injuries or control claims costs?
         2. Was the work-related event preventable? 
9. If cost relief from the Disaster Reserve due to an unfair burden is approved, the committee will identify:
   1. Claims which qualify for cost relief, and
   2. The portion of claim costs (i.e., full or partial) that will be charged to the Disaster Reserve.
10. What amount of partial claim costs can be charged to the reserve? 
    1. A percentage of costs charged to expense codes (e.g., wage loss, medical, etc.),
    2. Costs before and/or after specific dates, or
    3. A combination of (a) and (b) above.
11. The committee will:
    1.  Provide direction to operations staff to apply cost relief from the Disaster Reserve (i.e., which claims will qualify and what costs will be relieved).
    2. Provide written notice of the review decision to the employer. 
    3.  Advise the board members of unfair burden decisions made under the Disaster Reserve policy through a regular reporting process.