In the aftermath of the coronavirus, the National Council on Compensation Insurance (NCCI) is planning a rule change to workers' compensation that will affect businesses who are continuing to pay their employees who are unable to do their work from home.

According to Insurance Journal, those businesses will not be required to include the payroll paid to those employees in calculating their workers' compensation premiums. Workers' compensation premiums are based on payroll.

"The rule change is going to basically take the payroll for that period of time where the worker's furloughed and remove it from the calculation," said Jeff Eddinger, senior division executive at Regulatory Business Management.

"You can make an argument that while they're not doing their job, they don't need workers' comp coverage so the employers don't need to pay the premium for that time," he added. On its website, the NCCI explained, "If approved, this rule change will be distinct from 'idle time' under our current Basic Manual rules (Rule 2-F-1), and a corresponding statistical code 0012 will be created for reporting this payroll. This payroll will not be used in the calculation of premium."

The NCCI is the official rating bureau in 36 states. Some independent bureau states have taken matters into their own hands. California's rating bureau recently announced its own similar rule, excluding payroll paid during the shutdown from reportable payroll. Although other independent and monopolistic states are expected to follow California's example, some, like North Carolina and Indiana, plan to use the NCCI's language for the sake of consistency.

Eddinger does not believe the rule change, which is expected to be retroactive to March 1, will have much of a material impact on workers' comp carriers. "It's like hitting the pause button so you're not charging premiums, but you also don't expect any claims so in the end you think that it's just going to be a wash," he said.

The NCCI hopes to file its reporting code this week for approval by state regulators.

Instant Insights /

Rule change would ease workers' comp payments for employers

More From HR Executive

Related Stories

Recommended For You