Disputed Premium Audit Bill – Does Our Company Have To Pay Any Of It?

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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.

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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.

Graphic of Gavel and Dollars Disputed Premium Audit Bill Emblem from Web
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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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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

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