Your Workers Comp Premiums – Payroll Audit Date
The payroll audit date comes around once a year. This date should be marked on all employer calendars.
Your workers comp premiums center around a date that many companies ignore. In my last post, I pointed out that if your company has a policy renewing on 1/1/09, it is too late to worry about your E-Mod/X-Mod. Other than providing proper payroll forecasts for the 2009 policy year, there should be more of a concern for the upcoming 2008 policy year payroll audit.
The payroll audit should occur within 60 days after the policy expiration date.
Regardless of what is in your original policy for 2008, the payroll audit is the judge and jury on this policy. The payroll audit usually occurs approximately 30 days after the 2008 policy year ends. The original 2008 policy can be altered in many ways resulting in a much more expensive policy than anticipated. We received many calls and emails just after a payroll audit and billing were completed.
If you receive an audit bill, you have the right to an explanation of all increases in your original premiums. Do not refuse to pay the audit billing unless there is a legitimate dispute with the payroll audit. Many states give the insurance carriers the right to immediately cancel the current Workers Comp policy if an employer does not pay an undisputed audit billing. We sometimes see where our clients have disputed an audit only to find out their payroll had increased sharply, which will result in a large premium audit bill.
I will cover the Red Flags From A Payroll Audit next time. Many companies expect their policy to determine their workers comp premiums. A company needs its efforts to center on the premium audit date. This will enable to the company to pay the correct workers comp premiums from the premium audit bill.
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