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Hybrid Premium Audits Still Allowed For Larger Employers


Mail-In and Hybrid Premium Audits Possible With Technology

Hybrid Premium audits are becoming more popular every year due to technological advancements.  Securely scanning and emailing documents lessened the need for in-person audits by the workers’ comp premium auditor.

The two terms that seemed to raise the most questions were mail-in (voluntary) and hybrid premium audits.  I mentioned these terms in an article I wrote earlier this week.  I did receive a few emailed questions on these two types of audits.

Picture of Hand Hybrid Premium Audits Concept

Technology-based premium audits are usually the audits that we perform for clients.  I first heard the term hybrid a few years ago at an NSIPA national conference.

Due to technological advancements, many audits can be performed without being there in person.  Teleconferencing and the ability to scan large numbers of documents into very small files has allowed auditors to change their methods somewhat.

Mail-In or voluntary audits usually involve smaller employers.  The employer “voluntarily” fills out a premium form that is provided by the carrier.  Once the employer calculates the premium, a check is mailed in with the premium form.  The premium is usually calculated and paid monthly.

As the article earlier this week pointed out, the states are sticklers on in-person physical audits being performed by the carriers annually.   The rating bureaus see the in-person audit as developing a more accurate premium.

Woman Hybrid Premium Audits Using Laptop

One has to wonder if the states will allow more hybrid premium audits in the future for larger employers.   Mobile technology should allow auditors to be able to tour business without ever actually being there.  States may be slow to adopt hybrid audits.

The one main steadfast rule by almost all states requires an in-person physical premium audit.   This requirement means states will allow this type of audit with smaller companies.

One requirement used in the future will likely be a required physical premium audit for the first audit.  The carrier may then use hybrid premium audits for subsequent years.

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management 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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