Federal and state regulations require that most employers provide some form of workers’ comp insurance. This is a policy that can help cover the costs of treatments for injuries an employee might sustain while on the job. The initial cost of the premium for the employer is based on a formula that involves payroll, job classification, and safety history. At the end of a policy term, a workers comp audits take place to reconcile the cost that was paid vs the actual cost of the coverage. Some companies may have overpaid, while others might not have paid enough. The team at Caitlin Morgan Insurance Services advises that audits are a standard policy among all insurance companies and help the company only pay for what they need.
How to Prepare
There are providers who offer pay-as-you-go plans, making it easier for small businesses to manage their expenses. However, in the event that you are preparing for an audit, consider the following tips to make it a smooth process.
- Understand the workers’ comp audit rules.
- Confirm the accuracy of payroll categories.
- Consult your insurance provider for a list of required documentation.
- Actively take part in the audit process.
- Thoroughly review the results of the audit.
- Shop plan rates for potential savings.
If the results of the audit show that your company owes money, then your premiums usually increase but you must also pay any retroactive amount due before a new policy is written. You can always open a dispute if you feel the results aren’t accurate.