Flash Report: WCIRB Disappoints on Telecommuter Rate

The Workers’ Compensation Insurance Rating Bureau’s Governing Committee approved a filing creating a new 8871 classification — for clerical employees who work remotely.

Still, its staff effectively side-stepped a call from employers, and Workers’ Comp Executive, to have a lower rate apply now to the new classification. WCIRB is proceeding with plans to have the rate for the 8810 clerical classification apply to both classes until data develops in California to establish separate rates – a move that would delay any savings for as many as 4 or 5 years.

Employer representative Diana Rich, with Foundation Building Materials, urged the Bureau to consider the experience of dozens of other states that have had a telecommuter class for years and to apply a lower rate to 8871 now rather than years down the road. “I can tell you from my company’s experience that we have had no clerical claims for telecommuters.  So I think that the assumption that the claims experience is going to be lower, as evidenced by the other [National Council on Compensation Insurance], has some validity,” Rich told the committee.

NCCI has developed a telecommuter class rate for decades, and universally across its states, the rate is lower than the rate for 8810. On average, NCCI’s rate for 8871 is half the rate applied to 8810 in its states. In California, 8810 currently carries a rate of $0.23 per $100 of payroll. Note that computer programmers have a .06 rate.

In discounting the out of state evidence, WCIRB’s Brenda Keys pointed out that New York has a telecommuter classification, and its rate is 46% higher than the general clerical class. “Since New York’s workers’ comp system is more similar to California than many of the other states, we think it’s appropriate to combine these classifications for pure premium rate-making purposes until the telecommuter class develops its data,” she maintained.

But New York is an aberration.

The Bureau is a private organization with quasi-governmental responsibility. It is financially supported exclusively by insurance carriers in whose interests it operates.

Keys buried the issue by telling Rich that “the premium rate is part of a separate filing” that will be made to the Governing Committee in August, which effectively leaves WCIRB staff’s recommendation to develop the class with a combined rate with 8810.

Keys made no mention of Rich’s request in the official presentation of the proposed regulatory filing for adoption by the Governing Committee, which approved the filing.

Keys says the Bureau will make the formal filing with the Department of Insurance Commissioner later in the month.