Common Industries Where A Workers Compensation Review Will Help -

Over the years I've been involved in a lot of workers compensation policy reviews. I've been asked to describe those industries that I've seen benefit from having a workers comp policy audit review completed. If you're interested in what a professional workers comp audit consulting firm has to say about this then go here: Who Benefits Most From A Workers Comp Policy Audit Review, otherwise keep reading!

Here's a short list;

Car Dealerships

Wholesalers

Tool and Machine Shops

Millwrights/Foundries

Printing Companies

Manufacturers

Auto Repair Shops

All Construction Contractors

Masonry Contractors

Plumbing Contractors

Electrical Contractors

Drywall Installation

Concrete Construction

Steel Construction

Paving Contractors

Ready Mix Operations

Carpenters

Lawn and Landscape Maintenance

Churches

Machine Shops - Tool and Die

Warehouses

Sheet Metal Shops

Churches

Hospitals

Home Health Care

Physicians

Restaurants

Colleges and Universities

Building Maintenance

Condo Associations

Public Entities

All Types of Non-Profit Organizations

If you own or operate a business that falls into one of these categories, then you should seek out professional audit consulting help and have your workers comp policy and audits reviewed. You may be surprised at the errors they find that could put money back in your pocket!

Should I File An Audit Dispute On My Workers Comp?

We are asked this question quite often by business owners and clients alike. Here's my take on filing a formal audit dispute.

Let's begin by stating when you should not file a dispute;

1. If you think you pay too much for your workers comp....not a good enough reason to file a dispute. You must have details and be able to show why the audit is factually incorrect. You cannot just rely on the idea you pay too much in premium!

2. When you don't have enough money to pay the audit and just need a little time....bad idea to file a dispute. Payment issues should remain just that, payment issues. An audit dispute should never be used as a delay technique. Even if you do file an audit dispute, you still have to pay that portion of the audit premium not in dispute, and you must provide details!

So when is it a good idea to file a workers comp audit dispute?

1. When there is a clearly definable mistake found on the audit.

2. Payroll numbers used by the auditor do not match those provided.

3. A misclassification or change in work comp codes was applied to your workers.

Check out more details on when to file a workers compensation audit dispute at this page: How and When to File a Workers Comp Audit Dispute

So if you don't file a dispute then what can you do if you think there is a problem with your audit but you're not really sure where to start.

1. To begin with you should always be able to talk with the auditor, even after the audit is complete. If you have any question about how or why they arrived at what they did, contact the auditor and ask them!

2. Ask your agent for help. After all, your agent is the one who is most times responsible for establishing the work comp codes used and classifying the payrolls into the proper codes for the policy.

3. When in doubt always seek professional workers compensation consultants help. Most of the folks out there who provide this assistance have many years of experience and will be able to help you with most any workers comp audit problems. I've had success in working with Workers Compensation Consultants who can be found at http://workcompconsultant.com.

Hope this blog has been of some help to you. Thanks!

New Workers Compensation Benefits Web Pages

Workers Compensation Consultants has just put up three new web pages with valuable, free updated information about injured employees and workers rights and benefits for Alabama, Tennessee and Florida. These pages contain detailed information about medical payments due a worker because of an on the job injury, tips on how employee lost wages are calculated and provided, Temporary Total Disability (TTD), Permanent Total Disability (PTD) and Permanent Partial Disability (PPD) limitations, death benefits and limitations on attorney fees along with other valuable contact information.

Here's the pages:

Alabama Workers Compensation Benefits
Tennessee Workers Compensation Benefits
Florida Workers Compensation Benefits

So if you are looking for workers compensation benefit information for any of these states just click on the above link.

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The Workers Compensation Classification Code System

The workers compensation classification code system was developed with the idea of grouping similar types of businesses into a single identifying class with an individual assigned code number. This grouping of businesses requires that each business operation contain similar work processes. In other words the type of work being performed would appear similar in the manner completed, the potential risk exposure for injury to those workers performing the work task and the overall process used to complete the task.

Here's how this system fits into the overall pricing mechanism for workers compensation insurance; Once a business has been classified and assigned the proper workers compensation code, the insurance company then gathers the payroll or remuneration for that class code assigned. The payroll or remuneration then becomes the exposure base on which the workers comp insurance premium is calculated. Here's an important part, each workers comp code has its own associated rate.

So each work process is identified and placed into the proper code, right? Well not so fast!

Now we have to talk about the concept of the governing classification.
The governing class code is that individual code which best describes the total business operation and where most of the payroll for the operation is generated. For example, under the roof of a metal goods manufacturing plant you may find different, but similar individual work processes. You may find lathing operations, welding, planing, boring and other metal working or finishing processes. You may also find in the shipping department those workers who package, wrap and ship the finished goods. The governing class code for this type of operation would be that of a metal goods manufacturing plant. So rather than many individual work comp class codes, as you might expect, you would only find the single code of metal goods manufacturing. Confusing, you bet!

The workers comp code for a metal goods manufacturing business would perhaps carry a a $9 rate per 100 of payroll depending on the individual state involved. The code for a retail drug store would carry a rate per 100 of say $2, much lower than the manufacturing operation. It's pretty obvious in this example, the higher the risk, the higher the rate.

This is just a small example of how the workers compensation classification code system works and how it impacts the cost of a workers comp policy. So armed with this information it's easy to see how important a role proper classification plays.

In future blogs I'll go deeper into the code relationship with the cost of a workers comp policy. I hope this information has been helpful.

Learn more about the workers compensation classification system at Workers Compensation Consultants.


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Misclassification Of A Workers Compensation Code

I have performed many hundreds of workers compensation audit and code reviews over the years and will offer up for your reading pleasure several of these real life examples in this blog and blogs to come.

We were recently asked to review the workers compensation insurance program for a large manufacturing operation. The plant manager of this operation had a feeling that the current insurance carrier was using the incorrect workers comp codes for the type of work performed at the plant. The operation at this particular plant involved assembly of hydraulic hoses with an end use in the heavy equipment industry.

Sometimes workers comp codes and classification of a risk are easy....sometimes they are not! In this case the current insurance carrier had been classifying this plant as metal goods manufacturing. The metal goods manufacturing code includes such individual operations as stamping, planing, grinding, boring and other metal working procedures. In fact this plant in the past had been set up and performed pressing and metal working operations, where the metal goods manufacturing code would be appropriate. The review of this operation generated what we call a classic change of operation without notification. The owners changed the plant operation from one of manufacturing to one of performing assembly operations of previously manufactured items, without informing their workers comp carrier.

As with the example mentioned in a previous blog we were able to reclassify this operation to one of plumbing supplies assembly, a code which addressed the business operation more accurately. This reclassification resulted in a premium savings to this business of over 30%!

While not all business owners may enjoy the same type of outcome from a workers compensation code review as this operation it is certainly worth your time and effort to have your codes checked. Remember, no insurance company will question your desire to have these codes reviewed and when an error is found they will make the corrections needed to your policy. After all, the insurance company also wants the information to be correct!

For more information on misclassification of workers comp codes go to: Workers Compensation Code Reviews

Thanks for your time and I hope this blog has been helpful!

Free Workers Compensation Benefit and Rule Information - A National Workers Compensation Website

Workers Compensation issues are confusing especially when you try to find or need helpful information about workers benefits, on the job injuries and disabilities or if you need facts about workers compensation rules, statutes and laws for any individual state. If you search the web for this information you will certainly find hundreds of sites hawking their information about workers comp. Here's a site that's a little different!

Workers Compensation Consultants is a professional workers comp consulting firm. In addition to providing workers comp consulting services on a wide range of topics they also operate a national website that contains a ton of free information for employers, insurance companies, adjusters, employees, injured workers and medical providers. This site is laid out in an easy to find, factual, common sense manner that allows anyone with an interest in workers compensation or with a workers comp problem to find information on injured worker benefits, state by state rules and laws, how to prepare for an insurance audit, how to file a proper dispute, how to verify workers compensation codes and many many other topics of interest about workers comp.

So be sure to check out Workers Compensation Consultants, you'll not be disappointed by the information found on their site!

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Help with Workers Compensation Codes

Workers compensation codes, right or wrong, are one of the primary driving factors in the cost or workers compensation insurance.

When a workers comp policy is first set up, an agent or broker asks a series of questions to try and determine the correct workers comp code to use on the policy. This code is a description of the type of operations being performed at any given business. There are somewhere around 700 workers comp class codes available for use depending on the state in which your business is located.

The application of these codes can be very confusing not only to employers but also to insurance professionals. With so many to choose from you'd think it would be easy to make a proper classification. Well, code application can be deceiving. Here's some information on a recent case I worked;

• A large company recently acquired a manufacturing plant in which they produce hoses and fittings for the automotive industry. The workers compensation insurer was left in place after the acquisition. I was contacted by the new plant manager who asked me to review their workers compensation codes. The existing insurer had this risk classed as "machine shop." After a close review it was determined the proper code for this risk would be "plumbing supplies manufacturing." Correcting the workers comp code for this risk resulted in a 10% savings in workers comp cost on a payroll of over $900,000.
  

Workers comp codes do make a big difference! So make sure your business is properly classified! It's the first step in saving money on your workers compensation cost.

Here's a link to a page all about workers comp codes: Workers Compensation Codes

Thanks!