What One Mistake Would Harm Our Workers Compensation Program?
What would cause the most harm to our Workers Compensation program?
I received this question last week. This is one of the unasked questions that are always a concern of most employers. When we examine Workers Compensation insurance policies for employers, there is one area that I always see where large mistakes occur in the policy process. The mistake is just writing a check for a Workers Compensation bill – especially a Workers Comp audit bill – without even questioning how the insurance carrier or premium auditor calculated the amount. As I have mentioned in many blog postings previously, you must treat your insurance policy billing statements the same as a bank statement. If your company does not, then you are likely overpaying for Workers Comp coverage.
We just finished an audit where the employer wrote a check for over $50,000 because the insurance carrier sent them a bill. We found on this one, as we do many, that there were some miscalculations during the audit. The true bill ended up being less than $20,000. We do see this more often in recent times.
We recommend at least asking for backup documentation on how the Workers Comp policy or audit bill was calculated. There may be no errors. At least you can feel good about knowing that you at least reviewed the documentation that justifies the billing. Request the premium audit workpapers from the carrier at a minimum.
We usually say “Just Do Not Write A Check” as one of our mottoes we have mentioned in articles and previously in this blog post. At a time when every penny counts more than ever, make sure you feel 1,000% comfortable with writing the check. If not, start asking questions. You may be very surprised at the answers and the results for your company.
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