There Oughta Be A Law

 There was this kinda old-timey cartoon in the funny papers when I was a kid, called "There Oughta Be A Law", that I was thinking about this morning. First off, I was recalling it because of a recent Facebook feed item about that particular strip. But then I had to tell a prospective client that I couldn't help 'em with a Workers Comp classification dispute, and that provocative title popped up in my little head.

Let me explain.

The issue for my Oklahoma prospect involved Code 5606, for "Executive Supervisors", which carries a manual rate significantly lower than the general construction class for this business. Payroll for his executive supervisors had been placed in 5606 when the policy was issued, but when the audit was done, after the policy expired, the auditor moved this payroll into the much more expensive class. So this policyholder found me, as so many folks in his position do.

The problem was that the definition for 5606 requires there to be a foreman-type person between the 5606 person and the actual construction workers. Which, for this particular employer, was normally and regularly the case.

Except, once in a blue moon, the company used a sole proprietor plumber for some work. And according to the fine print in the NCCI Scopes manual, that knocks the supervisor out of Code 5606, for all his pay, even though the plumber is only rarely used on an occasional project. Because a sole proprietor doesn't have a foreman.

Now, this fine print detail isn't to be found within the pages of the policy. The policy only says that the insurer will compute premiums based on their manuals. It doesn't say what manuals, doesn't say how the policyholder might get a copy. Doesn't explain that, to see the NCCI Scopes manual, the policyholder would have to purchase a subscription from NCCI for that particular manual (one of several different NCCI manuals).

So my gripes about this situation are several. One, nothing in the policy informed the policyholder about this at the time the policy was purchased. Two, the time to inform this policyholder about this, IMHO, was when it was being purchased, not after the policy had expired. The original policy applied 5606 for the payroll of these executive supervisors, so this audit sleight-of-hand leaves the policyholder with the bad taste of a bait-and-switch maneuver by the insurance industry.

Three, the very way this classification limitation is designed feels, I dunno--unfair? Slanted in favor of the insurance companies? I'm pretty confident that policyholders would not find this provision equitable, if they were asked about it.

But they haven't been asked about it. Not really. NCCI does seek industry feedback in their classification deliberation process, but it sure doesn't feel like these rules have been designed with fairness to the policyholder as a priority. Maybe I'm wrong, maybe I'm being unfair.

But I don't think so.