Update: 8868 Class Code Changes - Proposed WCIRB Changes Awaiting Public Hearing August 3rd

On August 3, 2018, the California Department of Insurance will hold a public hearing regarding the proposed changes to the 8868 Class Codes.

The proposed changes, at the recommendation of the Workers’ Compensation Insurance Rating Bureau (WCIRB), will break the 8868 class code into the following divisions:

• 8868 & 9101 – K-College Schools (Academic Professionals & Non-Academic Professionals, Respectively)

• 8869 & 9102 – Vocational Schools, Academic Professionals & Non-Academic Professionals respectively)

• 8871 – Supplemental Education

• 8872 – Social Services

• 8873 – Training or Day Programs for Adults

• 8874 – Special Education Services for Children & Youth

• 8876 – Community Based Adult Services

These changes, if approved, could have a significant impact on California businesses. A recent article by the Workers’ Compensation Executer, a leading news source in the insurance industry, suggest up to 25% increases in some of the proposed class codes.

Rancho Mesa has specialized in the education arena for nearly 20 years and is prepared to assist clients with this transition. If you have any questions, please contact Rancho Mesa Insurance Services at (619) 937-0164.
 

WCIRB Proposed Changes Affecting Schools and Disabled Services

The Workers' Compensation Insurance Rating Bureau of California (WCIRB) recently announced plans to reclassify the 8868 (i.e., professors, teachers or academic professional employees) and 9101 (i.e., all employees other than professors, teachers, or academic professional employees) class codes under the belief that there is significant disparity between the businesses that currently fall under these two classifications.  These changes are planned to go into effect January 1, 2019.  

Currently the 8868 and 9101 classes, titled “schools,” consist of not only kindergarten through college schools, but also vocational schools, special education for disabled children, social services for children, and training programs for the developmentally disabled. While these businesses are similar in many ways, the claims appear to differ uniformly between these specific niches. This has a direct impact on the Experience Modifications (i.e., x-mod) of the organizations. According to the WCIRB, the average x-mod for K-12 schools and colleges is .81, vocational schools are 1.08, programs offering special education services for children are at 1.40 and training programs for developmentally disabled are at 1.30. 

Average X-Mod within 8868 and 9101 Class Codes

Source: WCRIB Data.

The proposed changes will continue to include the 8868 and 9101 class codes while adding four new classifications. The theory is that this will create more homogeneous classes for the members while at the same time leveling out the X-mods for all. As the process unfolds, it could create higher insurance costs and you will want to fully understand how these changes could affect your bottom line.

While there are still more details to be worked out, it’s apparent that there are significant changes heading towards those operating with the 8868 and 9101 class codes. Whether or not an employer will be positively or negatively affected will depend on their individual risk profile.

Rancho Mesa’s Human Services Group will be taking a leadership position in understanding these changes and their impacts. To learn more about how these changes will affect your organization, please Rancho Mesa at (619) 937-0164.