The insurance company changed workers comp auditors and the new auditor reclassified our employees.

A new client recently asked for help with this situation.

This client has been with the same insurance company for many years and all through those years has had the same company auditor perform a physical audit each time. The auditor they were using retired and was replaced by another company auditor. Upon completion of the workers compensation audit the new auditor reclassified the employees into a different, higher class. There has been no changes in the business operations or in the jobs the individual employees perform.

This situation actually comes up more often than you’d think! And it just goes to show you that this whole concept of properly classifying employees is, at best, a difficult job. Perceptions from one auditor to another, even though with the same insurance company, differ. And changes to an employers policy occur. Right or wrong, it seems many times these changes are not in the employers favor!

So what happened in this case? Keep in mind nothing has changed in the business operations or the processes used by the employer. After some investigation, we found that not only had the previous auditor retired but the commercial underwriter who had originally written the policy had also retired.  According to the agent there was some discussion with the insurance company underwriter about the proper classification and a decision was made by the underwriter to class the employees a certain way. The new auditor interrpreted the classification code descriptions differently than that of his predecessor and applied the new interpretation at audit.

We worked with all parties involved, provided independent objective research of the operations and classifications and discovered a better classification for use that was eventually adopted and is currently being used.

You see, a few things happen with codes and their application over time;

  • Newer more accurate code descriptions are developed;
  • Existing codes are modified and changed;
  • Older codes are discontinued;
  • Business operations performed by an employer change;
  • Interpretation of codes differ from parties involved;

You have to keep these things in mind when working with codes. And remember, just because a business operation has not changed doesn’t mean a better more accurate code hasn’t been developed and adopted for use!

Hope this helps you out! Thanks!

 

 

 

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