Premium Or Payroll Audit Process
The premium or payroll audit process contains many Myths and Truths. I was going back through some of the posts over the last few weeks. In The Six Keys To Saving On Workers Compensation post, I said I would cover #5 – Understanding Your Premium Audit. The premium or payroll audit is one of the most misunderstood areas of Worker’s Compensation. I thought I would cover some of the myths about your yearly premium audit.

Myth – The premium auditor is trying to help my company.
Truth – The premium auditor is there to collect as much premium as possible allowed under the law.
Myth – My premium audit is a smooth process. The auditor comes in, and I usually owe a bill that I pay right away.
Truth – The audit process should be viewed the same as a tax audit. Please see the preceding audit Myth/Truth for clarification.
Myth – I stand a great chance of getting a refund after my premium audit.
Truth – We have found that over 70% actually result in a premium bill. Less than 10% of premium audits return money to the employer
Myth – The premium auditor works for my insurance carrier.
Truth – There are more subcontractors doing Workers Comp premium audits than insurance company personnel.
Myth – I disputed my premium audit back to my agent and he/she said everything looked great.
Truth – There are specific instructions on how to dispute a premium audit. Appealing to your agent is not one of them.
Myth – My company can ignore the premium audit bill and pay it later.
Truth – You may end up having your current policy canceled if you do not dispute or make arrangements for paying your company’s premium billing. I have posted this very often – Never Ignore A Premium Bill
Myth – I received a small refund last year and this premium audit bill is not that large. I am going to go ahead and pay it.
Truth – Just because you have not been hit with a large premium bill does not mean that you are not being overcharged.
Myth – There are no companies out there except my agent that can help me if I have a question on my premium audit.

Truth – There are quite a few companies that aid employers with their premium audits such as J&L.
Myth – I can only dispute the current year’s Worker’s Compensation policy or premium bill.
Truth – Except in a few states, you may “look back” for three years for any policy or premium audit mistakes that resulted in overcharges.
These are only a few of the myths about the Workers Compensation Premium or Payroll Audit process. If you have any further questions, please contact us at [email protected] or [email protected]
©J&L Risk Management Inc Copyright Notice