December 8 2020

How COVID Changed WCB Premiums in Alberta and What You DON’T Know Could Cost You $1000’s!

Another invoice is due and this time it’s WCB Alberta Premiums for 2020! It’s my goal to offer the best advice to protect Canadian companies and their money. I wrote this to ensure that Alberta Businesses know how COVID affected premiums from WCB Alberta as we go into 2021. How preparation could save you thousands in WCB Alberta Premiums and help your company stay open.

When COVID took over the world in early 2020, the world and the economy changed.

Businesses went into lock down, travel ground to a halt, and people were isolated in their homes.

We all watched as governments scrambled to impose new laws. They explored ways to provide social assistance and financial relief.

For information on How to Manage WCB COVID Claims in Alberta go to our article listed under our common questions link at the bottom of the page.

How did COVID affect WCB Premiums in Alberta and what does that mean for me?

In March 2020, the Alberta Government reviewed ways to provide financial support to Alberta businesses during the COVID outbreak. Specifically, those paying WCB Alberta premiums.

They came up with 2 separate programs depending on your company demographics. The impact also depends on your insurable earnings.

What is Insurable Earnings?

Insurable earnings is another term for payroll.

It’s the money you pay to your employees because that is what you are insuring.

A company is insuring the earnings of the worker. Hence why WCB calls it insurable earnings.

What are the two programs designed to save Alberta companies on WCB Premiums?

The two programs designed to save Alberta companies on WCB premiums are:

Deferral of 2020 Premiums
Waiver of 50% of 2020 WCB Premiums

Which program do I qualify for?

Deferral Of 2020 Premiums Program

In this program, any private sector company (which is a for-profit company that is not owned or operated by the government) that pays WCB premiums in Alberta would have their 2020 WCB premiums deferred to 2021.

Meaning that for the year of 2020 a company would not have to pay WCB premiums for 2020 until 2021.

Usually, a company would get an estimate of their premium in March and then make payments to the estimate throughout the year. At the end of the year you get a final total calculated in the new year with a final invoice.

This was changed for 2020.

Waiver of 50% 2020 WCB Premiums Program

This means that for the companies that qualify your 2020 WCB premiums would reduce by 50% and need to be paid in 2021.

If you’re a private sector company and have a payroll in 2020 of $10 million or less, you are eligible.

What do I need to know to protect my company?

The WCB Alberta is sending out statements of your 2020 account between the end of November and Middle of December 2020. You should get this in an email from WCB.

Some of you may have already received it.

Essentially, what it will say is whatever your premiums would have been for 2020 based on your payroll estimate, you would only owe 50% of the premium for 2020.

This is important because many companies are thinking they don’t have to pay WCB premiums for 2020. This is incorrect.

This reduced amount would need to be paid BEFORE March 1, 2021, or the remaining balance will be added to your 2021 premiums with interest.

The interest would only apply to the portion that was unpaid on our 2020 premiums.

Here is a comparison of issues:

If COVID did NOT happen:

You might want to grab a paper and pen to follow along. The process begins with:

You report payroll to WCB Alberta at the start of 2020 of $1 million.
Results in $35,000 in premiums for 2020.
The WCB invoices from March 2020 – December 2020 based on $35,000 in estimated premiums.
After January 1, 2021 you send in your actual payroll (called insurable earnings) and WCB calculates the true cost of your premiums.
Let’s say after WCB reviews your premiums the total is $34,500, then your would receive a credit of $500 on your account. (The opposite is true if it’s higher.)

Because you overpaid during the year by $500.
Now in January 2021, you provide an estimate of payroll to WCB that results in potential premiums of $28,000 in 2021. This would be paid in 2022.

You would remove the $500 of credit from 2020 and be billed throughout 2021 based on $27,500. ($28,000 -$500)

HOW THINGS ACTUALLY ARE…

How it works BECAUSE OF COVID:

You reported payroll to WCB Alberta at the start of 2020 of $1 million.
Resulted in $35,000 in premiums for 2020.
The Alberta Government deferred 2020 premiums to 2021.
The WCB doesn’t invoice your company from March to December and companies do not make payments on WCB 2020 premiums until…January 1, 2021. Any payments made were refunded.
Since the premiums would have been $35,000 in 2020, but your company qualified for the 50% waiver, you are required to pay $17,500 between January 1, 2021 – March 1, 2021.
If you’re company can only afford to pay $7,500 by March 1, 2021 then it would be added to the 2020 premiums with interest costs.
Meaning, if your estimate for 2021 is $28,000 and you were only able to pay $7,500 of the $17,500 2020 premium the $10,000 would be moved to the 2021 with interest.

$17,500 (2020 Premium) – $7,500 (Paid before March 1, 2021)
=
$10,000 (remaining for 2020 premiums)
Your total premium for $2021 would be $38,000.
- $28,000 for 2021 premiums (no interest)
  +
- $10,000 for 2020 unpaid premiums (with interest)

This is important because while you may have your premiums reduced by 50%, you’re required to pay them within 3 months (by March 1, 2021).

For some companies this could be extremely difficult.

How can I save $1000’s on Premiums?

There are a few steps you can look at:

See if you received a copy of your statement for 2020.
- If you haven’t then call WCB at (780) 498-3999. Option 2 and then option 6.
- This will put you in touch with an agent
- Request a copy of the statement to be emailed to you.
  - It could have gone to someone else in your company.
Review the statement to understand what is owing and how you will be charged.
Once you review it, then contact us, and one of our team members will go through it with you to make sure that you understand the statement and possible options for you.
Look at the estimate of your payroll you had given WCB for 2020.
Compare your estimate with your actual payroll currently.
- You should have a good idea by now if you were still on target or if you over/under estimated your payroll.
- If you over estimated by more than 10%, then it is recommended that you call WCB and let them know that you want to adjust your estimate for 2020 BEFORE the deadline of December 31, 2020.
  - If you need help with this, contact us via email and we can make the call for you.
- By changing your estimate to more accurately reflect your payroll you can automatically reduce your premiums.
When you send in your actual payroll or actual insurable earnings, you will be provided with a credit or adjustment which would apply to your account.
You would need to pay this before March 1, 2020 if there is an amount owing to avoid interest.

What does 2021 look like for COVID?

At this time it is unclear if the deferral or waiver 50% program will continue for 2021.

As it stands, it appears that the normal invoicing structure pre-covid will return. If/should this change, we will update on our website with more information.

Vaccine Injuries accepted by WCB?

WCB / WSIB / Worksafe vaccine related claims are starting to get accepted by Workers Compensation Boards across Canada.

How Can I Help Others Like Me?

Firstly, you can forward this article to others like yourself or you can refer your friend or colleague to our WCB Training for Businesses and Employers to learn more a bout our training programs.

Please forward this article to others:

business owners,
safety people,
HR,
accounting departments,
accountants
and anyone you feel could benefit from this information.