In this edition of the Work Comp Consultants Video Network we'll talk about the workers comp audit process and give you some tips on why it happens, what to expect and how to gain control over the process by having an audit review. Tips that all employers should know and can use!
The workers compensation audit process is cumbersome at best!
Hi! I'm Randy Sieberg. Welcome to another edition of WorkCompConsultants Video Network. Today we're talking about the workers comp audit process.
An audit is the act conducted by an insurance company where they go in and inspect your accounting records and supporting tax documents to determine the actual exposures, generally in the form of payroll or payments made to uninsured subcontractors, that occurred during your workers comp policy period. This information is then used to develop the correct premium for your policy.
Most employers find the audit process to be intrusive...having an unknown person nosing around in your accounting books and tax records may have something to do with it...that does seems to bother most folks!
In fact the audit is one of the most important processes that an employer can go through. It's the audit process that ultimately determines the final cost of any workers comp policy.
I think it's common to believe that once an audit's completed, after an employer goes through the audit process, that the final product should be accurate. But when we conduct audit reviews for our clients we find, due to their complex nature, errors and mistakes in approximately 50% of all audits.
You'll find there are many causes of audit errors including...improper class code assignments or re-classification of codes on audit, improper application of ownership, subcontractor or independent contractor inclusion or exclusion and improper or misapplication of entities and other operations. We'll even find errors in basic premium calculations and misapplication of premium credits. All of these along with other errors and mistakes can occur during the audit process...all of these can lead to premium overcharges for an employer.
If you are an employer who has a workers compensation policy, you can see how it's important that you have an independent audit review conducted to help discover and correct errors found in your workers comp audit.
So if you believe a mistake was made during the process or that there's something wrong with your audit, or if you'd just like an independent opinion of its accuracy, give us a call, we can help, that's what we do!