Claims management: Avoid unpleasant surprises in the 8th quarter
When a workers' compensation claim is active in the 8th quarter, it can result in a significant increase in your CNESST assessment.
If your company pays the personalized rate or is a member of a prevention mutual group, it is important to understand the financial impact of an active claim file in the 8th quarter. This can result in a very significant increase in your contribution to the Commission des normes, de l’équité, de la santé et de la sécurité du travail (CNESST).
First, let’s clarify what an active case is. It is simply a workers’ compensation file for which the worker is receiving income replacement benefits. A file is considered inactive when the worker stops receiving benefits (due to a temporary assignment, for example).
Calculating the cost of a CNESST claim
It is important to understand that the CNESST calculates the cost of an employment injury by considering the disbursements related to this injury, which include income replacement benefits (IRB), medical expenses, bodily injury, and death benefits.
Then, to determine the actual cost of a case, it applies a loading factor that ranges from 1 to 4. The factor varies according to the periods during which the worker receives benefits. Some periods are more critical and therefore more expensive! In fact, the highest factors appear in quarters 8 to 16, with quarter 8 being the most important with its factor of approximately 4.
The 8th quarter period runs from October 1 to December 31 of the year following the year of the event, so for a 2021 event it would be October to December 2022.
Here is an example of a work injury that occurred in 2021, which shows that the amounts charged to the file will be greater starting in the 8th quarter of 2022. If a worker receives income replacement benefits during this period (even for a single day), the total disbursements on file will be multiplied by a factor of 4! For quarters 9 to 16, the factors vary from approximately 1.2 to 3.
Let’s continue our example by assuming that there is $30,000 in disbursements for an employment injury that occurred in 2021. If the worker received compensation from the CNESST for a single day between October 1 and December 31, 2022, the actual cost of the case would be over $120,000. If no benefits were paid during this period, then the cost of the case would be $35,000. This would mean an additional cost of $85,000 for a single day of compensation!
Since it is the employer who bears the costs of occupational injuries that occur in his company, it is to his advantage to try to reduce them to minimize his contributions to the CNESST.
It is therefore in the employer’s best interest to promote the reintegration of its injured workers, obviously while respecting their abilities and functional limitations. Temporary assignment remains the best method since it promotes the worker’s rehabilitation while minimizing the costs charged to the file. In temporary assignment, the worker’s salary must be entirely assumed by the employer to avoid the payment of compensation by the CNESST.
MEDIAL can help you implement temporary assignment by working with you to develop an inventory of tasks that meet the temporary restrictions of your injured workers.
At all times, but especially during the period leading up to October 1st, MEDIAL guides and advises its clients on how to avoid the impact of loading factors and thus limit the cost of each claim.
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