Think Like a Broker
Using Tricks of the Trade to Obtain Workers' Comp Classification Codes
One of the most common questions we receive is how to find the proper workers’ compensation class code for your temporary workforce. With hundreds of different codes and rules that vary by state, this can be a daunting task. As brokers, we have a few key tools at our disposal to quickly set us on the right path to determining proper classification. Instead of keeping these tricks of the trade all to ourselves, we’d like to share the knowledge and let you in on our little behind-the-scenes secrets to make your lives easier when it comes to determining proper classification.
All companies have a governing code. This is a term I’m sure you’ve heard us use time and time again. A governing code is simply the class code that generates the largest amount of workers’ compensation payroll for an organization. If you’ve ever taken any of our class code trainings, you’ll remember in most situations, the governing code will apply when classifying temporary employees.
There are two main rating bureaus that house employers’ governing code data – CA Compline for California risks and NCCI for all other states. Both of these are subscription-based services that make it easy to look up the governing code of any employer by simply typing in their name or FEIN.
- NCCI: NCCI is the rating bureau that has been adopted by most states which makes it our number one “go-to” when researching governing codes. Governing code data is contained in the Riskworkstation™ section of NCCI’s website and an annual subscription costs about $100 (per user, as of March 2017). This subscription service allows you to go online, type in the name of the client or prospect you’re working with and quickly obtain the governing code for that client.
- CA Compline: CA Compline is the rating bureau that houses information on California risks. The database is available to all employers and an annual subscription costs about $800 (per company, as of March 2017). Like NCCI, you can search by employer name and pull up not only the employer’s governing code, but also their current and historical experience modification factors, which makes it a great prospecting tool for those doing business in the state of CA.
Once the governing code has been obtained, we switch our focus to the Scopes® Manual. This is a publication containing comprehensive descriptions of all available workers’ compensation class codes on both the National and State Special (if applicable) levels. Scopes includes the range of businesses and occupations that apply to each class code, and is the tool we use to validate if the governing code we obtained from NCCI or CA Compline matches the temporary employee job description provided, or if there’s possibly another class code that’s a better fit. Scopes® Manuals are available from NCCI via an online subscription, or you may reach out to your agent for a hard copy.
Classification Cross Reference
While most states subscribe to National Scopes, there are a handful (CA, DE, MI, NJ, NY, PA and TX) that may have their own classification, depending on the industry. For example, a beverage distributor in Illinois would be classified to code 8018, however that same risk in California would be classified to code 8041 and in Pennsylvania would be classified to code 924. To assist with the classification across multiple states, there are a few publications that have put together cross reference guides that allow you to easily look up one code and cross reference with all other states. These can be obtained from NCCI via an online subscription, or you may reach out to your agent for a hard copy.
Don't Forget About Us
While some clients prefer having direct access to these tools to quickly obtain their own governing codes for quoting clients and prospects, or to simply gain a better understanding into the classification process, we want you to know we’re still here armed and ready to assist you in proper classification. Think of these as optional tools to assist you in the process, but not replacements for your Assurance service team.
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