Premium calculation for experience-rated employers

Premium is calculated twice annually:

• at renewal (based on estimate of wages)
• at adjustment (based on actual wages)

• wages x WIC Rate (%)

OR

• number of plates, rides, bouts, drives x WIC rate ($) - for per capita WICs

• WIC - Workers Compensation Industry Classification
• per capita WICs = taxi plates, racing harness drivers, boxers etc.

•  APP x contribution % rate

• applied when work related incident (or its complications) involves a fatality
• applied only once per incident, regardless of number of fatalities
• applied at end of policy year in which incident occurred
• the CCC is shown as a separate charge in the calculation and is included in the total premium payable.

The CPA rate for the employer is:

• a decimal number (in the CPA table) at the intersection of an employer's claim performance rate (CPR) AND the employer size or group size (APP or GAPP)

How is CPA calculated?

CPA rates contained in the CPA table are determined by icare's actuaries.

• CPA is used to adjust (discount or load) an employer's APP based on their claims performance compared to the Workers Insurance Scheme performance

Adaptive Maximum CPA

• An employer who has a maximum CPA cap for more than one consecutive year will have an increased CPA rate.
• Adaptive Maximum CPA applies to policy renewal years:
• 2019/20
• 2020/21
• 2021/22
• 2022/23

The CPM for an experience-rated employer is:

• a percentage rate derived by dividing an Employer's individual Claims Costs for the last three consecutive periods of 12 months by the employers total APP for the same three-year period
• Note: If a prior period is less than 12 months, the APP for the short-term period is annualised.

CPM informs the CPA component and does not appear in the main premium formula.

CPM determines an employer's individual claims performance.

It is compared to the Scheme's performance to determine if a loading or discount should be applied to the premium.

CPR informs the CPA component and does not appear in the main premium formula.

The CPR and the employer size (or group size, if grouped) will determine the employer's claims performance adjustment rate (CPA).

• If the employer's CPM is lower than the SPM, the premium will be reduced.
• If the employer's CPM is higher than the SPM the premium will increase.

SPM informs the CPA component and does not appear in the main premium formula.

How is SPM calculated?

• SPM is the percentage rate derived by dividing the Schemes Claims Costs for three previous premium years (36 months) by the Schemes total APP for the same three-year period.
• See current SPM rates

• APP x ESI%
• Discount off premium payable (before adjustments)

Employers get to keep this incentive regardless of claims.

• This is a contribution to assist employers to implement Workplace Health and Safety.

Available for the following policy renewal years:

• 2015/16
• 2016/17
• 2017/18
• 2018/19
• 2019/20
• 2020/21
• 2021/22
• 2022/23

APP x SER%

A performance based reward applied at policy renewal on the basis of:

• 3 years of policy history; and
• no catastrophic claim charge in last 3 years; and
• a CPR less than 100%

A percentage discount applied directly to individual claim costs where an injured worker is returned to work (from Date of Injury) between:

• 0<13 weeks – 15% discount
• 13<26 weeks – 10% discount
• 26<52 weeks – 5% discount

The RTWI does not appear in the main premium formula.

• An incentive to encourage early return to work of injured workers.

• Applied at hindsight adjustment
• Based on employer's claims performance
• May not be applied every policy year - depends on Scheme financial performance

Set to '0'

• Not applied to date

• Applies to all employers except those with per capita WIC Codes (for example taxis)
• Dust Diseases Contributions are contained in the premium rates table
• Paid by icare to Dust Diseases Authority to administer and pay for claims made under the Workers' Compensation (Dust Diseases) Act 1942

• Wages x MSFPA%
• Percentage rate per annum applied to wages of Division B Mining employers (WIC Codes 120000 to 152000)

• An additional amount included in total premium payable
• Collected for the Mine Safety Fund
• Paid by icare to Department of Regional NSW under Mine and Petroleum Site Safety (Cost Recovery) Act 2005

• Apprentice wages x WIC Code % rate
• Discounted from premium after premium payable is calculated

• Eligibility - NSW employers who employ apprentices under NSW Training Services contract
• Incentive for employers to hire apprentices and address NSW skills shortage