JL_risklogo.png

Workers Comp Audit Stress Reducer
Use It For Your Next Premium Audit

Are Workers Compensation Premiums Similar To Business Tax?

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn

Workers Compensation Premiums  = Tax?

We often hear that Workers Compensation premiums are just part of doing business. Would premiums then be the same as a tax? The final answer is no. I thought I would list a few of the similarities and differences.

Picture Of Couple Talking To Businessman Workers Comp Premiums Assisting
StockUnlimited

The following are similarities between Workers Compensation premiums and payroll taxes – they are both:

  • Based on wages
  • Subject to audit
  • Require excellent record keeping
  • Controlled by an outside party (IRS,  Insurer, Rating Bureau,  Department of Insurance)
  • Complex in nature
  • Three-year window for questions or disputes
The following are differences between Workers Compensation premiums and payroll taxes:
  • Almost all Workers Comp policies are audited, less than 2% of all taxes are audited
  • You can shop and compare policy pricing, not taxes
  • Payroll taxes have very few inputs to the calculations, Workers Comp premiums have many more variables
  • Some of the variables that go into Workers Comp premiums and audits are more of an opinion than taxes (Class Codes, etc)

The bottom line is that Workers they are are not just part of doing business like taxes.  Worker’s Compensation was never designed to just be a component of doing business.  Do not just write a check as if you are paying for the electric bill.   Participate in the Worker’s Compensation audit process by reviewing everything that crosses your desk from before the policy is signed until the final audit bill arrives usually 30 days after your premium audit.  

If you feel something is wrong with your Workers Comp policies or audits, look them over very closely. Stop just writing checks is one of our old mottoes. The Workers Comp bill you receive is not just part of doing business. Check out how they figures were arrived at before paying the bill, especially in this economy.

©J&L Risk Management Inc Copyright Notice

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn

Table of Contents

James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications

Subscribe

Get the latest workers' comp news FREE!

Name
This field is for validation purposes and should be left unchanged.