The National Council on Compensation Insurance (NCCI) is preparing a “reporting code” that will be filed soon for approval by state insurance commissioners. Businesses that have suspended operations due to COVID-19 but continue to pay employees who are at home but not working will not have to include the payroll paid to these employees in the calculation of their workers’ compensation premium. The organization intends to file the reporting code this week with 36 insurance departments.
NCCI , the workers’ compensation industry’s largest workers’ compensation data and rating organization, reports they have already communicated with insurance regulators advising them the reporting code would be coming and that they desired expedited approval.
Absent a rule change, payroll would be included in calculating the employer’s workers’ comp premium.
The California rating bureau has already announced that payroll paid during the shutdown will be excluded from reportable payroll. Other states with their own rating bureaus or monopolistic state funds are expected to follow suit.
There is a trade-off. A company that excludes an employee’s payroll can’t report any claims for that employee.
NCCI has indicated the rule will be retroactive, most likely to March 1.