North Carolina State Auditor Says 52,000 Uninsured For Workers Comp

North Carolina State Auditor Audits Industrial Commission

Beth Woods, CPA the present North Carolina State Auditor issued a rather stinging report on the Industrial Commission’s lack of oversight in the area of uninsureds.

Please note this is not counting the micro-companies that have less than 4 employees.  The report pointed out this differentiation.  The report is a PDF – you will need Adobe PDF Reader <<follow link.   The North Carolina State Auditor report can be found by clicking here.

The reports from her office are very easy to read and do make complete sense.  I encourage you to download it and take a few minutes to read it.  If you have business interests in or live in North Carolina, the report is critical.

Why? – because the employers that are paying their premiums or providing alternative coverages are basically subsidizing the scofflaws.  The Experience Mod system and the insurance rates in North Carolina have to be made up somewhere.  One would have to conclude it is the businesses that are operating honestly.

Last week, I wrote an article after my shock of discovering that the estimated number of  uninsureds for WC in North Carolina was off by 80%!!    I had thought there were  32,000 from the prior North Carolina State Auditor report in 2013.

A home builder magazine interviewed me on what the main issues  are today in WC.   My #1 concern was businesses that were not insured.

This is verbatim from the Auditor’s report:

According to the Commission, the Commission and the Government Data Analytics Center (GDAC) decided to develop a system quickly by using readily available data.

They intended to get the first part of a comprehensive tool in place and continually enhance the system. It has now been three and a half years since the Office of the State Auditor first reported the Commission’s lack of complete, accurate, and reliable data necessary to proactively identify noncompliant businesses.

Still, the Commission cannot perform a two-way match of data from the Department of Commerce to the NC Rate Bureau. This would potentially identify businesses or employers that have never had workers’ compensation insurance. While GDAC reports that a two-way match and some additional data sources are tentatively scheduled to be incorporated into NETS in fall 2016, there is no documentation that specifies when these enhancements will occur.

One thing to remember is that there is a response from the audited departments.   As I mentioned earlier, it may be a good idea to read the report in full.

If you follow the link above, I had written an article that points out that the Governor at the time just created another agency.

J&L Risk Management Consultants does help employers that have Workers Comp problems that are insured employers.  We have never assisted any company that did not have insurance or alternative coverages.

If you are an employer that does not have Workers Comp insurance in place in North Carolina or elsewhere, please take heed as the data structures are being improved to the point of identifying your business such as West Virginia did 10 years ago.

The situation was hopefully going to change when Staci Meyer was named the new Chairperson of the Industrial Commission.  It has not to date.

J&L Risk Management Consultants is not an agency, only a full-service consultancy.  However,  we can point you the right direction to obtaining some type of coverages for your employees.

The injured employees‘ benefits not being provided was the crux of the North Carolina State Auditor report.

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