Workers Comp Audit Materials Needed
The materials needed for Workers Comp Audit are communications, data, information and contracts. We receive this question quite often when customers or potential clients inquire about our services.
We usually do not disclose this information until a contract is signed as we use a copyrighted info grid that I constructed from working with clients over the years.
I decided to shed some light on the subject as this is where we often have a breakdown in communications as the amount of data required can sometimes be very large. The amount of data needed also depends on the states of operation for a certain business.
California insureds usually only require three years at a maximum due to the premium audit laws in CA. However, this is for states that operate only in California. We actually request the two prior years and the current years’ information.
In California, we can only examine the current year and the prior years’ WC data. This is due to the rules established by the Insurance Commissioner and the rating bureau – the WCIRB.
Almost all other states have a three year look-back period which means that the Insurance Commissioner State Rating Bureau, and/or NCCI allow the current policy and three years’ prior policies to be examined overall. There are some very rare exceptions to this rule. I will not cover those examples.
If your company operates in multiple states, the NCCI will usually have jurisdiction over your rating better known as a multi-state rating. This can cause some confusion as some of the independent bureaus such as California or Ohio wish to have the part of the ratings as a separate policy for just their state.
I would just list all the workers comp audit items that we usually request. However, there are many documents that are requested due to a specific company such as drivers’ expense records for a trucking company. The main thing to start now is a Workers Comp file, whether scanned or paper, that has EVERY piece of info you have received or sent including emails over the last five years – three for California employers.
We actually found a mistake made on a policy resulting from a sticky note that saved an employer over $25,000 over a three year period. I also recommend not letting your agent or broker have the only copy of your WC info including policies, amendments, payroll audits, etc. You should have a local copy of everything at your disposal.
NCCI, or your State Rating Bureau will usually provide a free copy of your E-Mod rating if your company requests it on your company letterhead.
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