How classification works
In states that use the NCCI system, home health care employees are commonly assigned to a home health classification, and clerical office staff who never visit clients may qualify for a separate clerical code with a much lower rate. States with their own rating bureaus, such as California and New York, use different code lists, so the code number on your policy may not match another state's.
Each code has a rate per $100 of payroll. The insurer multiplies that rate by your estimated payroll, then applies factors such as your experience modification and any schedule credits or debits.
Separating office and field payroll
An office manager who also covers visits on weekends usually cannot be split between codes unless your records clearly show the hours in each role. Many auditors expect timesheets or payroll entries that separate the work. Without them, the higher-rated field code may be applied to all of that person's pay.
Getting ready for the audit
- Payroll registers by employee for the policy period
- Quarterly payroll tax filings
- Job titles and duties for each employee
- Certificates of insurance for any subcontracted staff
- Records of overtime so the premium portion can be excluded where rules allow
Estimating payroll at renewal
Give your agent a realistic payroll estimate. An estimate that is far too low produces an additional premium at audit; one that is far too high ties up cash until the audit refund. If the agency is growing quickly, ask whether the insurer offers pay-as-you-go billing tied to each payroll run.
Frequently asked questions
Are nurses and aides in the same class?
Often they are grouped under the same home health classification, but rules vary by state and by insurer. Ask how your quote classifies each role.
What if my payroll grows mid-year?
The audit adjusts the final premium to actual payroll. Telling the insurer about large changes early can avoid a big bill later.