One of the most common questions we receive relates to finding 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 challenging task. As brokers, we have a few key tools at our disposal to quickly guide us toward the right classification. Instead of keeping these tricks of the trade to ourselves, we’d like to share our behind-the-scenes secrets to make your life easier when it comes to determining proper classification.
How much do you know about governing codes?
All companies have a governing code. This is a term you’ve likely heard us mention repeatedly. A governing code is simply the class code that generates the largest amount of workers’ compensation premium for an organization. If you’ve taken any of our class code training, you’ll remember that in most situations, the governing code applies when classifying temporary employees.
There are two main rating bureaus that house employers governing code data that 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 (National Council on Compensation Insurance): ncci.com is the rating bureau adopted by most states. It is our go-to resource for researching governing codes. Governing code data is contained in the Riskworkstation™ section of NCCI’s website, with an annual subscription costing $100 per user. This subscription service allows you to quickly look up a client or prospect’s governing code.
- CA Compline: cacompline.com is the rating bureau that houses information to California risks. The database is available to all employers for an annual subscription fee of $800 per company. Similar to NCCI, you can search by employer name and access the current and historical experience modification factors, which makes it a great prospecting tool for those doing business in the state of California.
Scopes® Manual
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 business and occupations that apply to each class code and is the tool that 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 is possibly another class code that is 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® Manual, 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, 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 guides can be obtained from NCCI via online subscription or you may reach out to your agent for a hard copy.
How we can help
While some clients prefer having direct access to these tools to quickly obtain their own governing codes for quoting clients and prospects, Marsh McLennan Agency (MMA) is here to provide expert support in proper classification. If you have more questions, please contact a Marsh McLennan Agency (MMA) advisor today.
