Can codes on a workers compensation policy be corrected?
The answer is yes, unfortunately the method is not always clear.
When the wrong workers compensation code is used on a policy it usually means the workers compensation premium paid is higher than it needs to be. If during a work comp code review it is determined that the work comp code is incorrect then the next logical step is knowing how to go about getting the error corrected. That's where it can get a little tough. Initial Workers comp code interpretations are made at most every level during the process of setting up a workers comp policy and each of those involved may have a different idea as to how a specific business should be classified. So when it comes to making corrections to workers comp code errors you may find many roadblocks in your path and may require a code dispute resolution to solve.
On this page we will give you a few steps to follow in the process of correcting a misclassified workers compensation insurance policy.
How to Correct a Classification Code Error -
The first thing you need to do is identify the workers comp code error. This can be accomplished by your own in house verification or by calling on the services of a workers compensation consultant to help you out.
You should begin by contacting your insurance agent or the insurance agency where you purchased your workers compensation policy. In some cases, depending on your state of residence, you may be dealing directly with the insurance company especially if your state has a mandated state fund where all workers comp is secured. Express your concern that your workers comp code is incorrect and ask to have your agent verify the classifications. Your agent should provide you with the description wording for the job classification being used on your policy. If this seems incorrect to you then ask for a detailed explanation. Keep in mind it's the agent who establishes the initial codes used on your workers comp policy. If you are unable to get anywhere by going through your agent or insurance agency then you may need to move onto the next step.
Your next step should be to contact the insurance company direct. The person at the insurance company who approves the initial work comp codes for your policy will be the underwriter. The underwriters job is to review for accuracy and acceptance the application for coverage as submitted to them by the insurance agent. If the submission is acceptable to them then the underwriter approves the application and moves it along to the processing department to have the policy issued and mailed out. Many times the codes used by the agent are incorrect. But the application is still approved by the underwriter. This happens because the underwriter must rely on the agent for correct information and sometimes the agent will make an error. With some insurance companies you'll find the underwriter will not talk directly with you but will insist on going through the agent. This can be a road block to you accomplishing your code correction.
After a workers compensation insurance policy is issued you will find that many insurance companies will conduct an onsite inspection of your business. Many business owners look at this as an intrusion in their daily operations however this is a very important step in the gathering of information phase. This inspection is the eyes and ears of the underwriter. The insurance company inspector is there to verify the proper application of workers comp codes on your business. Think of this as a pre-audit! As a matter of fact many workers compensation insurance companies perform this type of operation. This is an opportunity for you to go over your operation in detail with the company representative. It is an opportunity that you have to make sure your business codes are correct and if not to have them corrected.
Keep in mind, workers comp codes are to be representative of your business operations and your insurance company may have some flexibility in the application of those codes. Sometimes you may have to appeal a code application to the advisory organization within your state. For example if your state advisory organization is NCCI then you may request to have a NCCI inspect your workplace to establish the correct codes for your business operations. The down side of this is that NCCI will charge a fee to perform this inspection and that fee can be substantial.
If you encounter problems having a classification or code problem corrected you may need to contact a workers compensation consultant to help. You'll find there are a few good consultants out there on the web. All you have to do is search "workers compensation consultants" and you'll be presented with several to choose from. Of course this is the type of work we do! So if you need help correcting a workers compensation code problem just contact our office.
Workers compensation codes are not static. They are dynamic in that codes are reflective of your business operations. As operations change, so must codes change in order to properly reflect the risk exposure of your business operations. A misclassified business can cost the owner thousands of dollars in overpaid workers compensation premium. When an error is found in the work comp codes for a business it is very important to have a correction made. It may be more difficult have a code problem corrected due to the many variables involved. There are two ways to correct a code problem.
Do it yourself, or
Have a professional consultant do it for you
Whatever method you decide to use to correct a code situation, make sure work comp code errors are corrected! There's a high percentage of classification mistakes made simply because of the very complicated system of codes, their descriptions and methods of application. Just because you may have been provided with a written code description, also known as the scope, doesn't mean that your interpretation of that code is correct or that it may apply to your business operations. Remember, you must take code descriptions within the entire context of the classification system. The use of correct codes play a very big part in the overall integrity of the entire workers compensation system.
Let Workers Compensation Consultants be your FIRST RESOURCE for help with CLASSIFICATION CODE PROBLEMS AND SOLUTIONS. We help correct code mistakes. When you need help with a CLASSIFICATION issue, contact our office, we can help, that's what we do!