Wednesday, April 11, 2007

West Virginia Changing WC Classifications

The state of West Virginia is continuing its transition from a monopoly state fund to a state that allows competitive private insurance. The latest step is to move in two steps to the NCCI classification system used in many other jurisdictions. At the moment, West Virginia still has only one Workers' Comp provider--BrickStreet Mutual Insurance is a mutual insurance company that was formed from the old state monopoly fund. But in the next few years other insurers will be allowed into the state to compete for Workers' Comp business from employers, and so it was necessary to shift over to the classification system used by insurers in other states.

The old classification system used by the state fund and BrickStreet had under 100 classification codes. Last July, BrickStreet moved to a new system with 470 classifications, and come July of 2007 will transition to the full 586 NCCI classifications codes.

This will no doubt be a source of some confusion and difficulty for WV employers, particularly in light of the fact that even though the NCCI classification system is widely used, errors in application of the system are still widespread. (Classification errors are among the most common causes of overcharges that I find in my consulting work.)

So although West Virginia is getting in step with most of the rest of the country in regards Workers' Comp classifications, employers would still be well advised to check those new classifications carefully.