A Simple Audit Error Costs Employer $2,000!

We recently assisted a small employer who contacted us with a workers compensation audit problem.

He operates a small, family run auto repair garage and has had his workers compensation insurance with the same insurance company for several years. His business operations have not changed and his payroll or remuneration has remained stable. His workers comp policy was audited and shortly after that he received a bill from the insurance company for about $2,000. That may not seem like a lot of money for some people but for a small business owner that can be the difference between getting paid or not for the month!

We discovered that the audit completed this year was a self audit, where he filled out the paperwork and sent it directly into the insurance company. After a quick review of the audit worksheets we discovered the business owners payroll was included in the audit, however he, being a sole proprietor, was excluded in his state from coverage and had not elected to be included.

With a quick assessment of his situation and some communication with the insurance company we were able to make his $2,000 bill go away!

Lesson Learned: Even if you’ve been with the same insurance company for years…it pays to have your audits reviewed! After all , you never know when a $2,000 audit bill is caused by a simple, correctable mistake!