In Ohio, the Bureau of Workers’ Compensation (BWC) uses manual classification codes to determine your workers’ compensation rates. These codes can vary greatly, and the code your business is assigned will make a massive impact on your wallet. What if these codes are wrong?
Believe it or not, there are many businesses in Ohio who probably don’t realize they’re classified under incorrect manual codes. Whether the BWC assigned you an inaccurate code when you first started your business or your business operations have changed significantly since you received your codes, having the wrong manual code can spell trouble.
Luckily, it’s possible to have your code reviewed and changed to recalculate your premiums.
Understanding Workers’ Compensation Manual Codes
All Ohio businesses are assigned manual codes by the BWC which determine their rates. There are two types of manual codes that the BWC will assign — basic and standard exceptions.
What are basic manual classification codes?
This is the single code that will describe your general “type of business”. The BWC only assigns one of these to each business, often neglecting to take each businesses specific operations into consideration. For example, a classic automobile restoration business may be assigned the basic code 8393 Automobile Body Repair. However, this code assignment does not factor in your warehouse workers, sales & marketing team, or office staff.
What are standard exceptions?
These are employee classifications that are common to many businesses and are generally not assigned as a company’s governing classification. As such, they are assigned a special exception code. A few examples are:
- 8810 – Clerical Office Employees
- 7380 – Drivers, Chauffeurs, and their Helpers
- 8742 – Salespersons, Collectors/Messengers, Outside
Note: Since some basic classification codes already include one of the standard exceptions, employers assigned those codes do not qualify for the related standard exception. For example, a company assigned the basic code 8800 Addressing or Mailing Companies and Clerical would not qualify for the 8810 Clerical Office Employees exception because the basic code already contains this exception.
Want to learn more? Here are a few helpful resources.
- 4123-17-08 Classifications According to National Council on Compensation Insurance — BWC
- Manual Classification — BWC
How TPAs Like Sheakley Can Help You Change Your Code
What happens if your manual classification code is correct? You could be paying exorbitant premiums, or, you could risk paying hefty back fees if the BWC audits your company. This isn’t an uncommon occurrence. At Sheakley, we’ve seen companies that have been classified under the wrong code for many years before becoming clients.
Your TPA will be your first line of defense against incorrect code classifications. Outlined below is Sheakley’s process for getting manual codes corrected.
One of the first things we look at when we work with a business are their classification codes. These manual codes can significantly impact your premiums, so we need to ensure that the code classification fits with their business model. Remember, even if you belong in another classification with higher rates, changing your code now will prevent you from being charged significant back fees when the BWC performs a random audit.
- If we notice that a manual code is incorrect, our team of workers’ compensation experts will work to get the code corrected. we will strategize with our workers’ compensation team and get the code corrected.
- If we feel that an assigned manual code is nuanced, we may request that the BWC audit your business to determine if you were assigned the correct code. Our team will be there to assist throughout the auditing process.
- Once the code correction process begins, we will do a cost analysis on the new code classification and assist the employer in preparing for any impacts of the change.
- After the code has been corrected, we will continue to monitor the business and update the code as necessary.
These simple steps can make a significant difference to a business’s bottom line. We ensure that your business processes are uninterrupted during the code change process, freeing you to focus on other tasks.
Manual Classification Code FAQs
How does the BWC determine my code?
- On the BWC’s application for coverage, there is an operations description section. The answers provided there are the BWC’s primary reference when assigning a company’s classification codes. If you didn’t fully elaborate on the application or your business processes have significantly changed, it may be time to request a code reclassification.
Why are my rates so high?
- You may be assigned an incorrect classification code or you may operate in an industry that the BWC considers to be high-risk. Whatever the case, a TPA like Sheakley can help reduce some of the costs and administrative headaches associated with your workers’ compensation program.
Will I get money back if I change my code?
- A classification code change could potentially earn you a refund, but you could also receive a bill for back fees. It all depends on the premium rate of the new classification code to which you are assigned. Consult with your TPA before you begin the code change process so you’re prepared for any outcome.
If You Think You Have the Wrong Code, We Can Help
Do you feel that your assigned workers’ compensation classification code is incorrect or outdated? Don’t worry, you’re not alone. At Sheakley, we understand that businesses are constantly changing and we’ve helped hundreds of clients change their codes to reduce premiums and remain compliant.
Are you ready to experience the Sheakley difference? Contact us today and we’ll help you get back to doing what matters – growing your business.