Looking for help with a workers compensation audit problem? Lets talk about where you can turn to when an audit problem or premium problem has occurred on your policy.
Not all workers compensation audit problems are the same. It’s not a one size fits all kind of thing because audit problems come in all shapes and sizes! From simple clerical errors, like the incorrect transfer of payroll numbers, to complicated classification code and payroll separation mistakes, audit problems can be elusive. Guided by a complicated set of rules, which of course are state specific, and for the most part unavailable for a self help type of employer or policyholder, most employers facing audit problems really don’t know where to turn to for help, they become frustrated with the whole process and eventually end up causing more problems for themselves than needed.
Most audit problems are initially recognized by an employer when they receive a large, unexpected audit bill for additional premium. The bill comes as a surprise to the employer whose immediate reaction is one of shock. “How could this happen? I’ve done the same work for years. There must be a mistake!” Many of the calls we receive at our office start off just like this and generally take the path of two tales. The first path where an actual mistake has occurred, is identified and a correction is made. The second path where the audit is determined correct, no mistake is discovered and no correction can be made. The discovery process of an audit error can be likened to that of a lesson in attention and detail. Remember this, not every employer is alike, not every audit is the same and not every audit error is easily discoverable!
The first place an employer should look for help would be with the insurance agent who placed the workers compensation policy. The agent should be able to assist you with the basics. They should be able to show you how the original policy was set up, what payrolls were used, what classification codes were used and what rates and discounts were applied to arrive at your original premium. From there a comparison should be made between the audit information and the original policy to help identify the specific problem or to confirm the accuracy of the audited information. Most agents can help an employer with this process. Some employers secure their policy without the help of an agent, go directly to an insurance company or purchase coverage somehow online and never meet with an agent. When you don’t have an agent to work with you can be at a disadvantage when problems occur. It’s for this reason that working with a good agent, one who has experience working with workers compensation, is important.
Many times an audit error is not obvious, not easily detectable or involves some aspect in which an agent may not be familiar with and not able to help. Complicated classification code problems, code reclassification, payroll separation or experience modification rate issues can be difficult to solve and may require the assistance of a workers compensation consultant. What might seem obvious and easy to fix to an employer and their agent may actually lead them down a path that will be more costly. If you need outside help then ask for it!
Here’s what you should do when faced with an audit problem:
- Contact your insurance agent. Ask them to help you understand and explain what happened on your audit.
- If you are an insurance agent and need help with a workers comp audit problem, contact an independent workers compensation consultant for assistance.
- If you are an employer and don’t have an insurance agent, contact an independent workers compensation consultant for assistance.
- Or if you are an employer and want an independent outside opinion of your audit situation, contact a work comp consultant.
Audits are often incorrect. Employers often overpay premium because of undiscovered audit problems. You don’t have to go it alone! Have an audit review conducted by an independent work comp consultant. I can’t think of a single reason an employer should not have their audit reviewed every year!
Contact our office if you have any questions about an audit or if we may assist you with an audit problem.
Hope this helps!