Workers Comp Audits don’t sound like a lot of fun. And let’s be honest, they aren’t! If you’ve received a notification from your insurance company regarding an audit, don’t panic.
What Is A Workers Comp Audit?
Workers Compensation Insurance acts as a replacement of wages if a worker is injured on the job. Employers pay premiums that are then paid to injured workers.
A workers comp audit is generally conducted at your insurance company’s request. These audits can be performed via phone, mail or in person with an Auditor. Unless they have reason to believe something isn’t accurate, these audits are very routine and straightforward.
Insurance companies use any information gathered to determine the final premium you’ll be charged. Typically, the original quote is based on your estimated payroll.
What Information Is Requested During An Audit?
Considering the most basic workers comp audit, you’ll most likely be asked to provide several items.
Payroll journal and summary
Federal Tax Report- 941
State Unemployment Tax Reports
Any additional overtime payroll records
The size of a company will determine what type of audit you can expect. A larger corporation might be audited in person about two months prior to the expiration of the policy. However, a smaller company might be asked to fill out and mail a voluntary audit within 30 days of the policy expiring.
Making sure the Auditor has the required information is essential to a smooth audit. Most important: be sure the information you provide is accurate.
Also, don’t forget to request copies of the audit report. Auditors make mistakes and if an their mistake costs you money, be prepared if you need to file an appeal.
Workers Comp Audits aren’t a fun process. But understanding their purpose and working to assist in a smooth and efficient process can reduce the hassles and hopefully reduce the premium!
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