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Work Comp Audit Bill – We Cannot Pay It Immediately

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We Are Unable to Pay Work Comp Audit Bill – Help

Companies that cannot afford their Work Comp audit bill is one of the main reasons that we are contacted overall.   The work comp audit bill is usually mailed to the employer within a few days after receiving the workers comp audit report

Picture of Hand Using Calculator Work Comp Audit Bill with Laptop
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If your company receives a bill without a full breakdown of what is charged, we recommend that you immediately write, not call, the insurance carrier to inform them that you have received a bill with no explanation of charges.   The work comp audit bill will usually have an address on it.

One question to ask is – Was the premium audit accurate?  Sometimes, a sharp increase in payroll will result in a bill that is unexpectedly high.  Make sure your payroll figures match up with the premium auditor’s figures.

The worst thing to do is to just file the bill away.  If you renewed with the same carrier that has sent you the bill, you may be cancelled for non-payment.  In other words, the worst thing to do is to ignore the bill   Another complication is that employers which are written through a state risk pool are not allowed to renew with a delinquent balance to one of the carriers providing coverage in the risk pool.

 

If you, after verifying the bill, feel that you owe the total, you should contact the carrier by phone as soon as possible.  It is up to each carrier, but they may allow you to pay it off over time.   Do not expect this to happen automatically.

drawing of clock Work Comp Audit Bill Time To Audit
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Alternative insuring arrangements such as Professional Employment Organizations (PEO‘s) will bill your company each payroll cycle.   The work comp audit bill is charged as your company turns in payroll.

Premium finance companies can be seen as an option.  However, unless I am mistaken, there are no premium finance companies that will allow you credit at the end of a policy.   Your company needs to have had this arrangement upfront when the policy is written.

Finally, the steps are:

  1. Make sure an explanation of the work comp audit bill was previously sent or included with the bill
  2. If not, immediately write the carrier, certified return receipt
  3. Verify the payroll, class code, and the covered subcontractors
  4. Contact carrier immediately if your company cannot pay, it may be possible to pay over a short period of time
  5. DO NOT ignore the bill
  6. Pay what you owe, but not an extra penny.
  7. Seek out a PEO or a Premium Finance Company before your next policy renews

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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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