As a business owner dedicated to the welfare of your employees, you are probably well-acquainted with the critical role of WorkCover insurance. This safeguard is pivotal in protecting your business and ensuring that the well-being of your workforce remains a top priority.
However, recent developments have unveiled several complex changes to the WorkCover landscape. From stagnant premium rates to a $5.5 Billion deficit, we have compiled the essential information you need to know to confidently navigate this space and ensure that your business is prepared for changes ahead.
The Australian Government introduced the WorkCover insurance scheme to ease the financial burden for employers when one of their workers is sick or injured and unable to work for a short period of time.
Each year the Government sets the "average insurance premium rate", which, unfortunately for business owners, has not been set at an adequate level for some time.
During the last financial year, Workcover incured a deficit of $1.6 billion, following a $3.9 billion deficit the previous year.
Now they are out to recover their costs! As of July 1st 2023, the Victorian Government raised its target average premium by nearly 42%.
They've also introduced a number of reforms following escalating financial pressure on the scheme, whose long-term viability is being questioned.
Several factors have contributed to the rate rises, including:
• Many workers remained on the scheme for more extended periods than what was foreseen upon the introduction of the scheme.
• Employers now have to wait more than six months for an independent medical provider to review a worker's ongoing entitlement to benefits.
• Mental health claims are higher than in previous years, often take longer to resolve and require additional services.
• Over the 20+ years since the introduction of WorkCover, the total amount paid out in claims is far higher than what has been changed in insurance premiums.
Most business owners must budget for increased insurance rates in the coming years.
Businesses operating in areas with a higher risk for compensation claims (e.g. construction and healthcare) will likely see more significant increases than businesses in other industries.
With the new reform, we can expect the following:
• the average premium rate will increase to 1.8% (this is a 42% rise on the previous year)
• eligibility criteria have been adjusted for mental injury claims and some weekly benefits
• the Victorian Government has established a Return to Work scheme to get people back to work faster
Whilst the full extent of events is yet to unfold, businesses will need to take proactive action to be well-prepared.
By engaging a specialist Worker's compensation insurance advisor, you can identify gaps in your insurance, and put short and long-term strategies in place. All of which can be customised to your business's needs.
CMCA is one consultancy service dedicated to assisting you with all your WorkCover needs.
With 25+ years in the WorkCover Industry, they bring you a wealth of knowledge and expertise.
A consultation session* can help identify gaps and opportunities with your insurance needs from an OH&S perspective.
Chiara and her team can help you navigate the world of all things Workcover by providing services such as:
• conducting a risk assessment of your business
• ensuring you have all the necessary documents required for OH&S
• helping you to complete forms for your insurance renewal
• Supporting you through the claim process
• Provide advice for employers unsure of their entitlements, obligations or what to do next.
As the landscape of WorkCover evolves, business owners must navigate rising insurance premiums and intricate reforms.
CMCA offers vital expertise, knowledge and support.
Contact Chiara on 0432 598 753 or visit https://cmcaservice.com.au/ for more information.
*This service incurs a fee.
