Estimated Premium Audits Not Sound Judgement By Employer
Estimated Premium Audits for non compliance costs many employers dearly. Premium audit bills and notices generate most of the calls and emails we receive on a consistent basis. The first question that is asked usually concerns allowing the premium auditor to examine their books. The issue of privacy comes up often with the numerous reports on the NSA.

The best way to pay what your company rightfully owes (and not a dollar more) is great preparation and organization using a basic spreadsheet app.
The best way to do this is to have everything in the initial premium audit letter available to the auditor. Spreadsheets that summarize the payroll records can be helpful. Being organized is the key.
The rules for audits are usually in your policy. Most states allow the auditor to TRIPLE your estimated audit. The key here is “estimated.” What constitutes estimated an estimated premium audit amount? The rules allow much of your final estimated premium audit bill to be up to the premium auditor. This is the person you have ignored for a number of week or months.
If your company is in the situation, you should contact the auditor and schedule a date. Make sure you document when you called the audit and the subject of your conversation.

We have seen estimated audit bills where the premiums were five to eight times the normal amount. As I mentioned in the last paragraph, your company is leaving much to the premium auditor by not agreeing to let him/her do their job. The rating bureau rules allow them to examine any of your company’s financial records.
All workers’ compensation policies have a section on this process. Take out your original policy. You will find that section towards the end of the policy documents.
The only way to actually reduce an estimated premium audit bill is to allow the audit that was going to occur in the first place, except now your company has a big, tall red flag on the information you will be providing to the auditor.
If, after the premium audit, you feel there is something wrong, you may dispute the audit figures. We have never assisted any employer in how to present the figures to a premium auditor.
There is a very large group of articles on this blog in reference to premium audits that you can read for free. You may print them out as needed.
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