May 5, 2020

NCCI provides premium relief for policyholders affected by COVID-19

The Vermont Department of Financial Regulation has approved Item B-1441—revisions to the National Council on Compensation Insurance manual rules related to the COVID-19 (coronavirus) pandemic. These revisions are retroactive beginning March 1, 2020.

This fling revises and establishes rules related to:

• definitions, treatment, and reporting of payments by an employer to paid furloughed employees as a result of federal, state, and/or local emergency orders, laws or regulations, issued due to the COVID-19 (coronavirus) pandemic, which impact an employer’s staffing or business operations;
• any claims attributable to paid furloughed employees; and
• final premium reporting for employers affected by the COVID-19 pandemic.

The Basic Manual rules shown below reflect the application of payroll to furloughed employees, which will not be included in the premium basis during a temporary period of time.

BASIC MANUAL—2001 EDITION

RULE 2—PREMIUM BASIS AND PAYROLL ALLOCATION

B. PAYROLL

2. Excludes:

n. Payments made by an employer or any public governmental entity to paid furloughed employees as a result of federal, state, and/or local emergency orders, laws or regulations, issued due to the COVID-19 (coronavirus) pandemic which impact an employer’s staffing or business operations. However, any appropriated funds or loans received by an employer as authorized by any law or regulation, or public governmental entity, that are used by an employer specifically to retain or hire working employees are not excluded. Refer to Rule 2-F-3 for the definitions of paid furloughed employees and payments to paid furloughed employees. This Rule 2-B-2-n is effective March 1, 2020. The expiration date of this rule will be December 31, 2020, which may be amended to an earlier or later date as circumstances warrant in consultation with state regulatory authorities. This rule will be removed from the Basic Manual automatically, upon the applicable expiration date.

BASIC MANUAL—2001 EDITION

RULE 2—PREMIUM BASIS AND PAYROLL ALLOCATION

F. WAGES FOR TIME NOT WORKED

1. Idle Time

Idle time is downtime that occurs when employees are not working and the employer pays the employees for the time not worked. All wages paid to the employee for idle time must be included in payroll.

For purposes of this Rule 2-F-1, idle time does not include “paid furloughed employees” or “payments to paid furloughed employees” as provided in Basic Manual Rule 2-F-3. The expiration date of this paragraph will be December 31, 2020, which may be amended to an earlier or later date as circumstances warrant in consultation with state regulatory authorities. This paragraph in this Rule 2-F-1 will be removed from the Basic Manual automatically, upon the applicable expiration date.

BASIC MANUAL—2001 EDITION

RULE 2—PREMIUM BASIS AND PAYROLL ALLOCATION

F. WAGES FOR TIME NOT WORKED

3. Payments to Paid Furloughed Employees During Federal, State, and/or Local Emergency Orders, Laws, or Regulations Issued Due to the COVID-19 (Coronavirus) Pandemic

For purposes of this Rule 2-F-3, “paid furloughed employees” and “payments to paid furloughed employees” are defined within this rule. “Paid furloughed employees” means employees who continue to receive payments during a temporary layoff or an involuntary leave and are not performing any work duties for an employer.

“Payments to paid furloughed employees” means payments made by an employer or any public governmental entity to paid furloughed employees as a result of federal, state, and/or local emergency orders, laws or regulations, issued due to the COVID-19 (coronavirus) pandemic which impact an employer’s staffing or business operations. Such payments do not include any appropriated funds or loans received by an employer as authorized by any law or regulation, or public governmental entity, that are used by an employer specifically to retain or hire working employees.

Payments to paid furloughed employees must be assigned to Code 0012, in accordance with the Statistical Plan. Payments to paid furloughed employees made in accordance with this Rule 2-F-3 are excluded from the premium and experience rating calculations only if the employer keeps separate, accurate, and verifiable records. If separate, accurate, and verifiable records are not maintained, payroll is assigned to the classification for work normally performed by the employee prior to any emergency orders, laws, or regulations issued due to the COVID-19 (coronavirus) pandemic.

If an employee is requested to perform any duties for an employer, the employee is not deemed a paid furloughed employee for any period of time they are performing duties for the employer. If the employee is not deemed a paid furloughed employee, payroll must be assigned to the classification applicable to the work being performed in accordance with Basic Manual Rule 1-A.

This Rule 2-F-3 is effective March 1, 2020. The expiration date of this rule will be December 31, 2020, which may be amended to an earlier or later date as circumstances warrant in consultation with state regulatory authorities. This rule will be removed from the Basic Manual automatically, upon the applicable expiration date.

The Statistical Plan rules (shown below) exclude the claims paid for furloughed employees in the development of experience rating factors.

STATISTICAL PLAN—2008 EDITION

PART 3—EXPOSURE INFORMATION

F. EXPOSURE AMOUNT

2. Nonpayroll Exposure

d. Paid Furloughed Employees

Paid furloughed employees means employees who continue to receive payments during a temporary layoff or an involuntary leave and are not performing any work duties for an employer. Effective March 1, 2020, payments by an employer or any public governmental entity to paid furloughed employees as a result of federal, state, and/or local emergency orders, laws or regulations, issued due to the COVID-19 (coronavirus) pandemic which impact an employer’s staffing or business operations must be reported to Statistical Code 0012—Paid Furloughed Employees. Such payments do not include any appropriated funds or loans received by an employer as authorized by any law or regulation, or public governmental entity, that are used by an employer specifically to retain or hire working employees.

The expiration date of this code will be December 31, 2020, which may be amended to an earlier or later date as circumstances warrant in consultation with state regulatory authorities.

Code 0012 may be used as a Statistical Code to report the payments only; or it may be used as a Classification Code to report the payments with a zero rate and zero premium.

Payments reported to Code 0012 are excluded from premium and experience rating calculations only if the employer keeps separate, accurate, and verifiable records.

STATISTICAL PLAN—2008 EDITION

PART 4—LOSS AND EXPENSE INFORMATION E. CLAIM COMPONENTS 1. Required Claim Components f. Classification Code

(d) Paid Furloughed Employees

For any claims attributable to an employee occurring prior to or after a temporary layoff or an involuntary leave, report losses to the classification for work normally performed by the employee that corresponds to the employee’s payroll. No claim can be reported to Code 0012—Paid Furloughed Employees.

This rule is effective March 1, 2020. The expiration date of this rule will be December 31, 2020, which may be amended to an earlier or later date as circumstances warrant in consultation with state regulatory authorities.