New WorkSafeNB CEO determined to tackle rising premiums charged to employers
Premiums driven up by claims granted by tribunal when workers appeal
The new CEO of WorkSafeNB says he's moving quickly to tackle what he calls "challenges" that have forced employers in the province to pay higher premiums in the last two years.
Doug Jones says while changes to the system are up to elected officials, he sees a problem with the powers of an appeal tribunal that has been blamed for those premium increases.
"As the leader of an organization, you'd like to have the ability to control all the levers," he said in his first media interview since taking the top job this spring.
"When you don't control a key lever, you look at it and say, 'What else can we do?' So it's challenging right now from my perspective. We don't design it, so however it turns out, we'll live with it and adapt."
Employers complained loudly late in 2016 when WorkSafeNB announced premiums — the amount they pay into the workers compensation fund per $100 payroll — would jump from $1.11 to $1.48. They increased again at the start of this year to $1.70.
WorkSafeNB officials blamed the powers of the Workers' Compensation Appeals Tribunal, created in 2014 so injured workers could challenge rejections of their claims.
They said tribunal decisions were effectively rewriting WorkSafeNB policies, expanding, in some cases retroactively, the benefits that the agency must pay out to workers.
Unlike WorkSafeNB itself, the tribunal is not required to consider how its rulings affect the employer premiums, which are paid into a fund to cover the costs of benefits.
That means WorkSafeNB is unable to influence how much it pays out — "an interesting spot to be in," according to Jones, who took over as CEO in March.
"That's a bit of a unique thing for New Brunswick. We're the only jurisdiction in the country that has an outside influence on that level, that adjusts the whole equation."
An independent task force is studying whether to change the system, and Auditor-General Kim MacPherson is also looking at the issue.
An internal 2016 presentation by the WorkSafeNB board to the government, recently obtained by CBC News, shows senior officials were warned in 2016 that the tribunal's power would send rates soaring unless the law was changed.
I think at the time it was a reaction to cost pressures.- Doug Jones, CEO of WorkSafeNB
Even if the task force makes the same recommendation, the Sept. 24 election means the legislature won't be able to pass changes before premiums are set for 2019.
Jones said that in the meantime, he's trying to implement changes to lower costs as much as possible within the existing law.
"Let's just figure out how we're going to fix it and go forward," he said. "The teams have done quite a lot of work on understanding what all that means and how they're going to adjust things."
That includes a new process that is helping workers get into treatment faster, which means their injuries may heal faster and cost the system less in the long run.
Jones is a retired Canada Post executive who was working as deputy city manager in Edmonton when he was recruited to take over WorkSafeNB.
Before his arrival, he said, an "internal resolution office" was established to review compensation claim decisions that might otherwise go to the appeal tribunal.
Since he took over, he has added more staff to that office so that all decisions are reviewed.
"We're varying or changing our own team's original decisions based on that."
That in turn could avoid tribunal decisions that set new precedents, apply more broadly and drive up costs.
Fewer overturned cases
So far this year, it appears to be working, with the tribunal overturning only 16 per cent of WorkSafeNB decisions, compared with 44 per cent in 2016 and 23 per cent in 2017.
"We think that's the strength of having a second set of eyes," he said.
Jones said he wasn't comfortable with WorkSafeNB's decision last year to change its policy on how much money to keep on hand in its compensation fund.
The policy was to charge premiums that would ensure the fund had 110 per cent of the amount needed to cover claims.
But after the 2017 premium increases, then-labour minister Donald Arseneault declared, "I do not want to see that happen again." The board changed its policy to require only 100 per cent of its liability.
That meant a smaller premium increase in 2018 but it also increases the risk that a market downturn or a spike in claims will require another big increase.
If WorkSafeNB's costs had flattened out, the change would have been a good decision, Jones said, but instead they're continuing to climb at a slower rate than before.
"I think at the time it was a reaction to cost pressures," he said. "With the benefit of hindsight, maybe we wouldn't have gone there. We recognize that's a challenge."