Longstanding compensation claims from injured workers are dragging the Yukon Workers’ Compensation Health and Safety Board to the brink of financial solvency.
If the board closed tomorrow it would have enough money to pay out its claims, board chair Craig Tuton said Thursday as he released the board’s 2005 financial statements.
But to keep the fund viable, injured workers must heal and get back to work, said Tuton.
“Our problem area is in the claims cost, and more importantly in the duration of claims,” he said.
“It’s been an issue for some time, and quite frankly it’s getting worse.”
The statements show a mixed review of the board’s finances.
Revenue for the board comes from two sources: investments, and payments from 2,400 Yukon employers required by law to pay into the no-fault compensation plan.
The board is one of the few in Canada that does not receive government funding.
Its investment income is up by about $3 million from 2004, thanks to a 26.3-per-cent return on the board’s investment portfolio, worth $134.4 million.
Assessment revenue from employers has also increased by $2 million, to $11.6 million in 2005.
“The economy has grown, and that has increased our assessment revenues a bit,” said Tuton.
Employers are also paying more to the fund because the board reduced subsidies.
Subsidies will be phased out completely by 2007, said Tuton.
The board needs to spend its money more wisely, he said.
Its greatest liability — benefit obligations — increased to $105 million in 2005, up from $96.7 million in 2004.
“This is a larger-than-expected increase,” said chief financial officer Jim Stephens.
“We’re not getting workers back to work.”
Claims are the inevitable outcome of the compensation system, but they are costing 40 per cent more per year than in the 1990s, said Stephens.
“The main culprit is duration (of claims).
Some claims are lasting 20 or 30 years, said Tuton.
“I’m not proud of the fact that I have to say this, but we are in the top three in Canada for duration,” he said.
Many Yukon claims last 100 days, while other jurisdictions complain when they have claims lasting longer than 35 days, he added.
Claims are also being made decades after an injury allegedly occurred, said Tuton.
There is no statute of limitations on making a compensation claim, and some have come in 30 years after the fact, said Tuton.
And there’s no time limit on appeals either.
“We get appeals from 30 years ago, and that’s not acceptable,” he said.
Overall, paying for 1,350 claims in 2005 cost the board $21.2 million, compared to $19.5 million in 2004 for 1,304 claims.
Administering an increased number of longstanding claims cost the board and extra $1.7 million.
As a result of all these factors, the board’s reserves are being slowly depleted.
The board had $35.6 million in 2004 and $28.1 million in 2005.
Cash flow for operations decreased to $1.4 million in 2005 from $4.2 million in 2004.
“But we’re still fully funded,” said Tuton.
“We’re one of the few boards that can stand up, across the country, and say that.”
The board has made submissions to an ongoing workers’ compensation act review.
It is anticipating a number of policies to take effect this fall.
One would limit the amount of time an appeal can take to two years.
Another would open an investigator’s position, currently lacking in the Yukon.
But most workers don’t want to get injured, said Tuton.
“Let’s be fair: there are injuries that last for life, and those are the sort of people we have to look after,” he said.