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What Are the Different Types of Workers' Compensation Codes?

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  • Written By: Sandi Johnson
  • Edited By: John Allen
  • Last Modified Date: 12 August 2014
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In the United States, federal and state laws require certain employers to cover work-related injury for their employees via a workers’ compensation insurance policy. Such policies cover medical expenses and lost wages in the event an employee is injured on the job. When insurance companies assess premiums for workers’ compensation coverage, they use classification codes established by either the National Council on Compensation Insurance (NCCI) or their specific state’s classification system. When reporting workers’ compensation claims for injuries, employers must use statistical codes. Job classification codes and statistical codes for reporting are the two primary types of workers’ compensation codes.

The most common workers’ compensation codes are classification codes. These codes seek to provide an orderly method for grouping similar workforce tasks and risks to better determine appropriate insurance premiums. For example, the risk of injury to those involved in job duties relative to routine office work are considerably less than those job duties that involve operating heavy equipment. As such, the NCCI and state classification systems group like job duties or workplace environments into some 700 or more categories of similar job descriptions, environments, and risk factors.

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When using the NCCI Scopes Manual, the industry standard for workers’ compensation codes, each classification of job descriptions uses a four digit numeric code to identify specific job roles and working conditions. As an example, the workers' compensation codes for an Electrician Assistant and electrical equipment installers are 3179 and 9516, respectively. Jobs involving building concrete culverts and bridges carry a classification code of 5222. Codes for specific jobs are assigned by insurance agents, NCCI officials, or underwriters and auditors for the insurance company when a company or organization first applies for a workers’ compensation insurance policy. Workers' comp class codes are then used to determine premiums based on foreseeable risk.

On the other side of workers' compensation codes are statistical codes used for reporting purposes. Also known as workers' compensation claim codes or workers' compensation injury codes, these codes provide specific information when filing a claim for benefits. When an employee is injured, the employer must submit documentation to their workers’ compensation insurance provider for payment. Such documentation includes what areas of the body suffered injury, where the injury occurred, and other pertinent information. To simplify the reporting process and ensure orderly data collection regarding workplace safety statistics, a uniform coding system is used.

Just as job classification codes provide uniformity in determining workers’ compensation insurance premiums, statistical reporting codes provide the NCCI and state advisory organizations the ability to summarize injury data. Collecting data on workplace injury statistics highlights when certain industries require additional regulation regarding safety practices or when additional education regarding workplace hazards might prove beneficial. Likewise, insurance companies can act on claims faster using short codes rather than written descriptions, which can often be subjective.

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