Workers Compensation Premium Audit Bill – Your Four Choices

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Four Choices For A WC Premium Audit Bill

Over the years, we have received the most communications from employers when a premium audit bill has hit their desk and the payment is now due. Often, the bill has been sitting for a few weeks and the insurance carrier is now sending a second notice for payment.

Graphic of Calculator And Form Four Choices Premium Audit Bill
(c) 123rf.com

There are four choices on what to do with the bill:

  1. Ignore it
  2. Review it and ask questions
  3. Dispute it
  4. Pay it without even a review

There are very detrimental effects on three of the four actions. I will cover each one in more detail.

Ignore It

 

Ignoring a premium audit bill just delays the inevitable. A bill (sometimes large) is due. One of the warnings here is that in most states, you will lose certain rights if you ignore the bill too long. The longer a bill sits, the more unlikely a carrier will be amicable to any questions on the bill or a very late dispute.

 

Most bills will instruct you to please pay it in 1o or 14 days. Your policy will usually note that you have 30 days to pay the bill. If you wait until the 29th day, this will not help your company if you have questions on the audit bill.

If you have the same carrier for your new policy as the one that is billing you for the premium audit, your company or organization will likely receive a cancellation notice. With the economy as it is, insurance carriers are becoming very stringent on cancelling your new policy and not extending any deadlines.

Review It And Ask Questions

 

We recommend reviewing the bill immediately and asking questions if there is something that seems amiss. Phone calls are great, but everything should be put in writing to your insurance carrier with a cc: to your agent.

Picture of Auditor Four Choices Premium Audit
(c) 123rf.com

Writing your agent only may not necessarily protect your rights and remedies if you later wish to dispute the premium bill. Emails are OK, but I recommend sending certified return receipt letters. This may later save you great headaches.

If you feel something is wrong on your premium audit bill, that is usually a big red flag. I always say that a gut feeling is the best indicator that your concerns may be valid. There is a list of Red Flags you may wish to review on this blog.

Dispute It

 

If you still feel after asking questions to your carrier about the premium audit bill that there is something wrong, you always have the right to dispute the bill – within certain deadlines. The three things that will irritate your carrier:

  1. After paying the bill, then waiting months and months before deciding to dispute a bill – it is possible to do this, but your dispute will not be received well
  2. Disputing a bill with no reasons or data to back up your dispute – this is when you may wish to call in a premium consultant – yes, that was shameless promotion
  3. Disputing a bill just to delay payment – this often results in an even higher premium audit bill and may ruin the working relationship with your agent and carrier.

Paying It Without Even A Review

 

Hand Presenting Premium Audit Bill Icon
StockUnlimited

Paying a premium audit without even looking back over your associated policy and the auditor’s work papers to me is the worst of the four. You are not giving your company a fair shake if you just rubber-stamp pay it as a part of doing business.

I would say at least cover the Red Flags post that I referenced earlier in this post. A link to the post is provided there. Looking over your policy, audit, and premium bill does not really take that much time for at least a cursory review. You may be surprised by what you find there.

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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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