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

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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.    

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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:

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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. 

Man Calculating North Carolina State Auditor OnTable
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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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4 Responses

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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:

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