NCCI Names Most Reclassified Workers Compensation Class Code 9015
The Workers Compensation Class Code 9015 has long been a source of confusion for agents, underwriters, and premium auditors. NCCI (National Council on Compensation Insurance) reaffirmed the confusion by naming the Code as their most reclassified code.
In the past, NCCI had published their Top 10 Reclassified Codes each year. I assume we will just have the Top 1 only now and in the future.
How could Workers Compensation Class Code 9015 draw so much likely unwanted attention? Let us look a little closer.
I was catching up on my Worker Comp reading yesterday when I came across this article by NCCI on the most reclassified code Workers Compensation Class Code 9015 Building or Property Management—All Other Employees.
The reclassifications are due to in-person physical inspections by NCCI. The changes are not the result of an agent, insurance carrier, or premium auditor changing the codes.
According to NCCI, the 9015 classification terminology out of the Basic Manual, not the Scopes Manual, is:
- Applies to the care, custody, and maintenance of premises or facilities. Not applicable to an owner or lessee of a building who occupies the entire or principal portion of the premises for manufacturing or mercantile purposes. Includes doormen, security desk personnel, elevator operators, gatekeepers, and concierges. Separately rate maintenance or repair work at any location where the owner or lessee does not also perform janitorial services. Includes real estate management companies and real estate investment trusts.
- Clerical and sales employees are assigned to Code 9012—Building or Property Management—Property Managers and Leasing Agents & Clerical, Salespersons, including those who operate at a separate location from the properties managed.
License Public Domain-by. Corrina Duron Employees working exclusively for a country club operation run by a hotel, resort, condominium, or other community association are assigned to Code 9060—Club—Country, Golf, Fishing or Yacht—All Employees & Clerical, Salespersons, Drivers.
The third bullet point creates the most questions out of any classification codes mentioned in the article. We are contacted rather often by employers that are confused when they are reclassified into 9060.
- The 9060 Code was not mentioned in the NCCI articles as the Class Codes where 9015 employers find themselves post-inspection. The three codes where the 9060 Code employers are reclassified into consist of:
- Code 9012—Building or Property Management—Property Managers and Leasing Agents & Clerical, Salespersons, including those who operate at a separate location from the properties managed. For this one, I highly recommend you read the original NCCI article. You can download the PDF if you follow the link in red above.
- Code 8855 – Banks and Trust Companies – all employees including salespersons, clerical and drivers
- Code 8723- Insurance Companies – salespersons and clerical
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2 Responses
Bless your heart for stating that code 9015 was the most reclassified code in 2017 based on your inspection program. There are a few items that need to be clarified for the end users to understand your article.
1. There is not a single rule in NCCI’s Basic Manual on how to prioritize the governing code or treat companion codes that describe a business such as code 9012 Prop Mgmt. and 9015 Building Ops (Schools, homes for the elderly, condo’s etc. are other examples). They are always used and assigned together on the same policy to describe a business.
2. You cite Rule 1-B-5a and then you added a part to the rule that doesn’t exist in NCCI Basic Manual as justification for code 9015 being the most reclassified code. That part is:
“If a change to a policyholder’s governing class code occurs (as documented on an NCCI Inspection &
Classification Report), then the governing code is considered reclassified.”
AZ VO FL VO GA LC IL LC MS LC OR LC
8723 Ins Co’s .18 .20 .12 .09 .18 .12
8855 Banks .13 .56 .23 .10 .17 .11
9012 Prop Mgmt. .78 1.41 .67 .51 .95 .31
9015 Building Ops 3.91 4.71 2.65 2.12 2.84 1.97
9052 Hotel 2.11 3.45 2.01 1.88 1.62 1.72
9060 Club 1.71 2.40 1.08 1.06 1.79 .86
Note: VO = Voluntary rates; LC = Loss Cost rates
Above are the 2018 rates for 6 NCCI states across the country for reference. Viewed this way several items immediately become clear.
1. Code 8723 Insurance Companies & Code 8855 Banks have a cheap rate compared to code 9015’s rates in all states shown. Why would either of them want to overpay by assigning anyone to code 9015 since 2011 in Florida and 2012 in most other NCCI states as your article indicated.
2. Code 9012 Prop Mgmt. includes clerical and salespersons and thus code 8810 cannot be assigned for the same entity, on their payroll, in the same state. You didn’t move anyone from code 9015, you moved people into 9012 that should have always been assigned to this code instead of 8810.
3. The largest issue with making 9012 the governing companion code instead of 9015 is that based on Rule 1-B-5b “miscellaneous employees, local managers, etc.” are to be assigned to the governing code. Rule 1-B-5b is shown below.
“b. The governing classification is used to determine the classification treatment of:
• Miscellaneous employees
• Local managers
• Executive officers who regularly engage in duties that are ordinarily performed by a superintendent, foreperson or worker”
What this means in simple terms is that any employees whose duties or titles are not specifically listed in the descriptive note of code 9015 are automatically assigned to the governing code 9012 as miscellaneous employees with its substantially lower rate. Code 9012 companies should be dancing in the streets with joy.
4. Hotels under code 9052 should make themselves a club operation under code 9060 and get the cheaper rates in the 5 states shown except for Mississippi. The difference in rates is 50% less in Oregon & sizeable everywhere else. Again more dancing in the streets.
Your justifications outlined in this article didn’t really have anything to do with reclassifying payroll from code 9015 to any other code. The majority of it had to do with doing the two step on companion codes and saying code 9012 has the larger payroll and is now the governing code.
Again the problem is that there is no specific rule on companion codes in NCCI’s Basic Manual and that pesky part of Rule 1-B-5b regarding “miscellaneous employees” that will provide NCCI with classification issues into the future. Thank You, CG
Thanks CGV for your comments. One of the reasons I stopped the article was that it looked to confuse the reader instead of inform them.