Incorrect Workers Compensation Employee Classification Codes in the Chemical Industry can be costly.
Workers Compensation insurance premium rates are highly dependent on Employee Classification Codes. What are Employee Classification Codes? These are the four digit codes insurance companies use to set premiums for workers according to their job and the risks associated with their activity.
Two codes that impact premiums in the Chemical Industry are 4828 and 4829. At first glance the definitions look similar so you may be indifferent as to the code you place your employee under. That indifference could be an expensive mistake.
The National Council on Compensation Insurance ("NCCI") (www.ncci.com) defines 4828 and 4829 as the following:
4828 is applied to employees engaged in compounding, blending, mixing, bottling, and packaging chemicals.
4829 is applied to employees engaged in the manufacturer of products requiring a chemical conversion. A "chemical conversion" is the process whereby a substance undergoes a molecular change in composition.
Why the fuss?
The rates for 4828 and 4829 vary.
4828 4829
Iowa $2.36 $1.69
Mississippi $2.92 $1.10
Florida $6.32 $3.98
Rates are per $100.
If you have employees listed as 4828 when they should be 4829 you are overpaying your workers compensation insurance premiums.
Other common mistakes are with Employee Classification Codes are found in the following:
4511 - Analytical laboratories
4741 - Asphalt or Tar Distilling or Refining
1472 - Distillation - Wood
2132 - Distillery - Spiritous Liquor
Every code is priced differently.
What should you do? First, you should take a look at your payroll runs to see how employees are classified. Use the definitional codes provided by your State's Worker Compensation Bureau. The NCCI coordinates it for twenty-three states so you may start there.
Alternatively, you can hire a professional that specializes in Workers Compensation Audits. The most reputable firms do not charge an upfront fee. Typically they will go back three years and do it for fifty-percent of the savings. Your portion of the savings are furnished to you directly and you enjoy the benefit of lower costs for the next several years.
This article was written by Greg Walker at SMP Consulting Group. SMP's specializes in workers comp audits (www.smpconsultinggroup.com). Gwalker@smpconsultinggroup.com
"The Workers Compensation Audit Specialist for over 30 years!"
Wednesday, March 26, 2014
SMP Consulting Group announces new hires!
SMP Consulting Group is pleased to announce the hiring of Mark Serri and Pat Monahan to it's Working Partners acquisition team. Mark and Pat will report directly to Brian Kelly, Chief Marketing Officer and Executive Vice President. "the hiring of Mark and Pat continues SMP's tradition of
hiring talented and thoughtful professionals to help SMP maintain its Best in Class Working Partner relationships" stated Brian Kelly.
SMP Consulting Group is also pleased to announce the hiring of Todd Spencer and William Utley to our middle market company acquisition team. Todd and William introduce SMP's worker compensation audit service directly to middle market companies though-out the United States. Ed Kelly, President and CEO stated "We are excited to announce the hiring of Todd and William to our team. Todd and William provide a dedicated work ethic that compliments SMP's values and professionalism that our clients depend on".
Please join us in welcoming Mark, Pat, Todd and William!
By Greg Walker, SMP Consulting Group "the leaders in workers compensation audit". For further information gwalker@smpconsultinggroup.com or follow us on Twitter @workcompaudit or
www.smpconsutlinggroup.com
SMP Consulting Group is pleased to announce the hiring of Mark Serri and Pat Monahan to it's Working Partners acquisition team. Mark and Pat will report directly to Brian Kelly, Chief Marketing Officer and Executive Vice President. "the hiring of Mark and Pat continues SMP's tradition of
hiring talented and thoughtful professionals to help SMP maintain its Best in Class Working Partner relationships" stated Brian Kelly.
SMP Consulting Group is also pleased to announce the hiring of Todd Spencer and William Utley to our middle market company acquisition team. Todd and William introduce SMP's worker compensation audit service directly to middle market companies though-out the United States. Ed Kelly, President and CEO stated "We are excited to announce the hiring of Todd and William to our team. Todd and William provide a dedicated work ethic that compliments SMP's values and professionalism that our clients depend on".Please join us in welcoming Mark, Pat, Todd and William!
By Greg Walker, SMP Consulting Group "the leaders in workers compensation audit". For further information gwalker@smpconsultinggroup.com or follow us on Twitter @workcompaudit or
www.smpconsutlinggroup.com
Ed Kelly, President and CEO of SMP Consulting Group attends the AMCOMP conference.
The American Society of Workers Comp Professionals focusses on four principal objectives:
1. To maintain the integrity and degree of excellence in the field of workers compensation by providing a professional designation (upon fulfillment of various criteria, including successful completion of a core curriculum and/or qualifying work experience) that will serve as an industry standard;
2. To further the education of all workers comp professionals by providing relevant courses in the workers compensation field of study and in related disciplines;
3. To maintain a current understanding of emerging trends and issues in the workplace and how they relate to the field of workers compensation by means of newsletters, annual meetings, monographs, conferences and/or relevant seminars; and
4. To further ethical standards in the field of workers compensation by establishing uniform guidelines and principles.
AMCOMP is best know for its education certification program - Workers Compensation Professional ( WCP®)
Mr. Kelly provides leadership to AMCOMP through his Board of Directors role that he shares with many prominent industry leaders focused on worker compensation issues. AMCOMP Board of Directors.
SMP Consulting Group, the leader in workers compensation audits can be reached at www.smpconsultinggroup.com, @workercompaudit on Twitter or 631-647-9210
By Greg Walker (gwalker@smpconsultinggroup.com)
|
Headwind Capital Acquires Stake in SMP Consulting Group, The Leading
Nationwide Workers Comp Audit Firm
SMP, Nation’s Premier Workers’ Compensation Audit Firm, with Network of Locally Based Partners in Specialty Coverage, to Expand and Enhance Services and Products
SMP Consulting Group, the country’s leading workers’ compensation premium auditing firm as well as a
distributor of specialty insurance products through its nationwide network of partners, today announced a
significant capital investment in its capabilities by Headwind Capital. The announcement was made jointly by
Greg Walker, President and CEO of the privately held Headwind Capital, and Edward J. Kelly, Jr., President
and CEO of SMP.
Through this new relationship, SMP (smpconsultinggroup.com) will continue to expand its signature workers’ compensation premium recovery services to mid-sized companies that may be overpaying premiums due to erroneous employee classifications, outdated rates or other factors.
Additionally, the capital investment will enhance SMP’s Working Partners Network – which provides opportunities to middle-market brokers across the country to expand their offerings in their marketplaces with highly specialized coverage in specific industries. These industries include trucking, construction, health care, education, restaurants and nightclubs, parking garages, and municipal services.
“Through this new alliance with Headwind, SMP is uniquely positioned to help our clients recoup premium overpayments and reduce their costs moving forward, and back that up with alternatives and innovative options from their local insurance broker,” said Kelly.
“I have watched with interest the changes in the insurance space for a number of years, and have provided capital to grow a number of companies in the industry,” stated Walker. “As the economy continues to strengthen, employers will be looking closely at their insurance costs, and Headwind sees this as an opportunity to provide a valued service through SMP.”
Walker said he is also excited about SMP’s growing national Working Partners Network, which is comprised of select regional brokers. “Prior to investing I spoke with a number of Working Partners who are thrilled with SMP’s products and service offerings, and Working Partners brokers will continue to experience impressive growth in their business through their affiliation with SMP,” he noted.
SMP Consulting Group markets premium recovery and other cost-containment services to companies across the nation resulting in the retrieval of substantial dollars in overpayments made to insurance carriers and employee leasing companies (PEO). Services are provided on an exclusive basis to members of SMP’s nationwide broker network known as the Working Partners Network.
Headwind Capital, LLC, founded in 2008, is a privately held investment boutique that advises and invests in middle market companies in emerging growth markets. To date, Headwind Capital and its principals have structured, negotiated and closed over $3.0 billion in financing in fifteen different industries and within ten different countries.
Further information: gwalker@headwindcapital.com or Ekelly@smpconsultinggroup.com
Visit us on Twitter
SMP, Nation’s Premier Workers’ Compensation Audit Firm, with Network of Locally Based Partners in Specialty Coverage, to Expand and Enhance Services and Products
SMP Consulting Group, the country’s leading workers’ compensation premium auditing firm as well as a
distributor of specialty insurance products through its nationwide network of partners, today announced a
significant capital investment in its capabilities by Headwind Capital. The announcement was made jointly by
Greg Walker, President and CEO of the privately held Headwind Capital, and Edward J. Kelly, Jr., President
and CEO of SMP.
Through this new relationship, SMP (smpconsultinggroup.com) will continue to expand its signature workers’ compensation premium recovery services to mid-sized companies that may be overpaying premiums due to erroneous employee classifications, outdated rates or other factors.
Additionally, the capital investment will enhance SMP’s Working Partners Network – which provides opportunities to middle-market brokers across the country to expand their offerings in their marketplaces with highly specialized coverage in specific industries. These industries include trucking, construction, health care, education, restaurants and nightclubs, parking garages, and municipal services.
“Through this new alliance with Headwind, SMP is uniquely positioned to help our clients recoup premium overpayments and reduce their costs moving forward, and back that up with alternatives and innovative options from their local insurance broker,” said Kelly.
“I have watched with interest the changes in the insurance space for a number of years, and have provided capital to grow a number of companies in the industry,” stated Walker. “As the economy continues to strengthen, employers will be looking closely at their insurance costs, and Headwind sees this as an opportunity to provide a valued service through SMP.”
Walker said he is also excited about SMP’s growing national Working Partners Network, which is comprised of select regional brokers. “Prior to investing I spoke with a number of Working Partners who are thrilled with SMP’s products and service offerings, and Working Partners brokers will continue to experience impressive growth in their business through their affiliation with SMP,” he noted.
SMP Consulting Group markets premium recovery and other cost-containment services to companies across the nation resulting in the retrieval of substantial dollars in overpayments made to insurance carriers and employee leasing companies (PEO). Services are provided on an exclusive basis to members of SMP’s nationwide broker network known as the Working Partners Network.
Headwind Capital, LLC, founded in 2008, is a privately held investment boutique that advises and invests in middle market companies in emerging growth markets. To date, Headwind Capital and its principals have structured, negotiated and closed over $3.0 billion in financing in fifteen different industries and within ten different countries.
Further information: gwalker@headwindcapital.com or Ekelly@smpconsultinggroup.com
Visit us on Twitter
@Workercompaudit
Wednesday, March 5, 2014
How Employee Classification Codes impact your Workers Compensation Premiums
How Employee Classification Codes impact your Workers Compensation Premiums
Double digit increases in workers compensation premiums in 2014 should provide you a good excuse to focus on your Employee Classification Codes. As discussed on previous blogs the wrong code may cost you plenty.
Employee Classification Codes is a three or four digit code assigned by NCCI or a State's Workers Compensation Bureau. Class codes help differentiate between the various job duties or "scope of work performed" by employees. Each code is assigned to a specific function within an organization and denotes the risk the employee encounters each day. An employee working with a machine is more at risk of getting hurt then an employee in the accounting department. Therefore his assigned code requires a higher workers compensation premium.
Example
A machine worker inside a sheet metal products company will have an employee classification code of 3066 at pay a rate of $3.93.
An employee working at the same company in the accounts payable area will have an employee classification code of 8810 at a pay rate of $0.20. (note: both rates are loss cost rates).
If you have more then fifty employees its important you pay attention. The rate differential is significant and costly if you have your employees coded incorrectly.
Unfortunately the Employee Classification Codes may be a bit more confusing. A machine worker inside a sheet metal products company is not the same code as a machine worker inside a wood products company. In fact there are over 700 employee classification codes in the system. Each code requires a different payment.
The Employee Classification Codes are not complicated without reason. Each code is assigned a risk classification and the dollar amount assigned to that code requires a contribution to the worker compensation fund. Companies that employ people in riskier jobs contribute more dollars to the fund. That is how the system works.
Companies can go to the NCCI. The NCCI gathers data and analyzes industry trends. Its a good place to find Employee Classification Codes. You can also go to your State Workers Compensation Rating Bureau.
Start with a check list of every employee and compare their codes. You have the right to go back three years.
Professional firms are available to audit your Employee Classification Codes. You should never pay an upfront fee. A reputable firm will only charge you on a contingency basis, typically fifty-percent of the savings for the year they perform the audit and the recoveries they identify from the three prior years. The reduction in rates for the subsequent years are yours to enjoy.
By Brian Kelly, SMP Consulting Group "the workers compensation audit specialist"
bkelly@smpconsultinggroup.com or our website smpconsultinggroup.com
Share this Blog: Cut and paste the link below into your email
How Employee Classification code impact you workers comp premiums
Double digit increases in workers compensation premiums in 2014 should provide you a good excuse to focus on your Employee Classification Codes. As discussed on previous blogs the wrong code may cost you plenty.Employee Classification Codes is a three or four digit code assigned by NCCI or a State's Workers Compensation Bureau. Class codes help differentiate between the various job duties or "scope of work performed" by employees. Each code is assigned to a specific function within an organization and denotes the risk the employee encounters each day. An employee working with a machine is more at risk of getting hurt then an employee in the accounting department. Therefore his assigned code requires a higher workers compensation premium.
Example
A machine worker inside a sheet metal products company will have an employee classification code of 3066 at pay a rate of $3.93.
An employee working at the same company in the accounts payable area will have an employee classification code of 8810 at a pay rate of $0.20. (note: both rates are loss cost rates).
If you have more then fifty employees its important you pay attention. The rate differential is significant and costly if you have your employees coded incorrectly.
Unfortunately the Employee Classification Codes may be a bit more confusing. A machine worker inside a sheet metal products company is not the same code as a machine worker inside a wood products company. In fact there are over 700 employee classification codes in the system. Each code requires a different payment.
The Employee Classification Codes are not complicated without reason. Each code is assigned a risk classification and the dollar amount assigned to that code requires a contribution to the worker compensation fund. Companies that employ people in riskier jobs contribute more dollars to the fund. That is how the system works.
Companies can go to the NCCI. The NCCI gathers data and analyzes industry trends. Its a good place to find Employee Classification Codes. You can also go to your State Workers Compensation Rating Bureau.
Start with a check list of every employee and compare their codes. You have the right to go back three years.
Professional firms are available to audit your Employee Classification Codes. You should never pay an upfront fee. A reputable firm will only charge you on a contingency basis, typically fifty-percent of the savings for the year they perform the audit and the recoveries they identify from the three prior years. The reduction in rates for the subsequent years are yours to enjoy.
By Brian Kelly, SMP Consulting Group "the workers compensation audit specialist"
bkelly@smpconsultinggroup.com or our website smpconsultinggroup.com
Share this Blog: Cut and paste the link below into your email
How Employee Classification code impact you workers comp premiums
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