Urgent Question – Payroll and Premium Audit
I received this urgent question on payroll and premium audit at 2 AM. The sender must have been losing sleep over it.
We are now with a new carrier. Our Workers Comp Payroll Auditor came into our business four months ago. She went through our books and said everything looked good except for a few things.
We just received a bill for $85,000 with an overdue notice. We received no other warning and had no idea the bill would be so much. Our original Workers Comp policy was $105,000.
Should we just pay the bill as we are so late? How do we find out the results of the audit? Can we dispute the $85,000 bill? Should we contact the Insurance Commissioner? Please answer ASAP.
The insurance carrier will usually send the audit bill to the contact information they receive during the premium audit or the address on the policy. I looked up your company address and it is a PO Box. If you have a PO Box and the carrier sent it to your physical address, the bill and the backup info from the audit was likely returned to the carrier.
Your letter may have gone into a pile of returned envelopes at the carrier or will sometimes get lost in the mail. The carrier sent you the final notice by FedEx so it was delivered directly to your physical address.
The best way to find out the results of your audit is to immediately write the billing office noted on the bill. Send the letter certified return receipt. Explain to the carrier what happened and ask for a copy of the audit results and the auditor’s workpapers. Make sure you note that you receive mail at a PO Box.
This previous article on your choices when you receive an audit bill may help you. Judging from the name of your company, it is likely you have hired subcontractors. That could be the source of the additional premiums.
Quite often, a new carrier will view your workplace differently than the last carrier. Your business may have added in additional employees which will cause a spike in your payrolls resulting in an increase in premiums.
A cardinal sin is to dispute a bill without a basis. Another cardinal sin is to contact the Insurance Commissioner’s office until all other means have been exhausted. This will harm the relationship with your new carrier and your agent even before your first payroll and premium audit.
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