Disputed Premium Audit Bill – How Much To Pay?
One question that we receive the most often is the sufficient amount to pay when there is a disputed premium audit bill. Premium audits and the associated bills always generate a large number of questions.
The answer in the simplest terms is that an employer must pay any undisputed premiums as soon as practical. The key words are undisputed and practical.
The amount of the dispute needs to be as accurate as possible. Determining the correct undisputed amount can be a critical point. If your company pays too much, you lose your leverage in the dispute with the insurance carrier.
If you pay too little, your company is violating one of the basic rules of WC rating bureau (NCCI, WCIRB). The old saying about paying what you owe in full, but not one penny more would apply to this situation.
The practical time to make the payment is not necessarily when you see a bill due date. We have often seen clients receive the bill in the mail with the due date of the premium audit bill payment within just a few days.
If you receive a bill with a due date in just a few days, calling the billing department may keep your current policy from being cancelled if you are with the same insurance carrier on the renewal policy.
The best way to proceed is by making arrangements with the carrier as soon as you receive the bill if you feel that you owe it in full and cannot make the bill payment immediately.
Most insurance carriers have a very specified premium audit dispute process. The easiest place to locate the rules for disputing the premium is actually in the Workers Comp policy.
Some carriers ask for a form to be filled out while others request a premium dispute letter written on company letterhead by one of the company officers.
We usually recommend not using the forms provided by the carriers. Some of them seem to be very limiting on what can be disputed from the audit. Phone calls just will not work with disputes very well. The disputes need to be in writing and timely. Certified return receipt is the best method for sending audit disputes in to the carrier.
Another important factor to remember is there are very specific time limits on the disputes. Letting a premium audit bill sit for weeks can sometimes end up with an employer paying more than they should have even though there was a valid dispute.
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