{"id":11571,"date":"2016-06-10T14:01:05","date_gmt":"2016-06-10T18:01:05","guid":{"rendered":"http:\/\/firstnewnan.com\/?p=11571"},"modified":"2024-04-17T19:00:31","modified_gmt":"2024-04-17T23:00:31","slug":"boo-yah-work-comp-audits","status":"publish","type":"post","link":"https:\/\/firstnewnan.com\/boo-yah-work-comp-audits\/","title":{"rendered":"Boo-yah! for Work Comp Audits"},"content":{"rendered":"

Just say the words \u201cWork Comp audit\u201d<\/em><\/strong> and watch any business person\u2019s stress level rise.\u00a0 Maybe the industry should replace the word \u201caudit\u201d with the phrase, \u201cverify and validate.\u201d\u00a0 That\u2019s really what the auditor (whether company representative or<\/u> independent personnel) is trying to do.\u00a0 It\u2019s simply a process of comparing your estimated<\/u> labor payments and classifications to your actual<\/u> payments and classes.\u00a0 If your actual labor expenditures exceed your estimate, you may owe the insurance company more premium; if the actual is less than your estimate, the insurance company may owe you.\u00a0 The calculation between the estimate and actual will generate a document\u00a0 – Final Premium Audit Statement –\u00a0 which will be mailed to the business at the conclusion of the audit process.\u00a0 This statement tells the business owner if they owe the company, or if the company owes them.<\/span><\/p>\n

Keep in mind that this \u201caudit\u201d is usually conducted between two people who have never met each other, and one (auditor) is trying very quickly to get a snapshot understanding of an established company\u2019s business profile, depth, scope of work, and size of operation, while the other (business owner) is reluctant to provide any data at all to this person they just met.\u00a0 Oh, and did I mention there might be a thorough review of payroll records, payment data, and independent contractor payments?\u00a0 Who doesn\u2019t like a stranger digging through their financial records?\u00a0 Will the sensitive financial\u00a0 information be secure? \u00a0And what about identity theft? Security is a real concern and personnel data should<\/u> be protected.\u00a0 No wonder it invokes stress!<\/span><\/p>\n

Audits don\u2019t have to be stressful.\u00a0 Here are some pointers to a stress-free<\/span> less stressful<\/em> audit:<\/span><\/p>\n

    \n
  1. Accept it<\/strong>. Audits are part of the policy. \u00a0If you purchase Work Comp coverage, the company has the right to review the records in support of those labor classifications covered in the policy.<\/span><\/li>\n
  2. Be prepared<\/strong>. Audits are conducted within a month of the conclusion of your policy term, so there\u2019s no need to be surprised when you receive your audit request.\u00a0 Review your policy for the effective dates, the payroll class codes covered by the policy, and the remuneration (payments for labor workers) for each class code.\u00a0 (These remunerations by class code are the estimates mentioned in the first paragraph.)<\/span><\/li>\n
  3. Schedule a time and place that is convenient for you, usually at your place of business<\/strong>. Auditors try to manage multiple appointments in one day, so if the time they suggest isn\u2019t convenient, simply offer an alternate time.\u00a0 If your office isn\u2019t available, you could arrange to meet at a library, restaurant, coffee shop, or other public place.<\/span><\/li>\n
  4. Set aside 30 minutes<\/strong>. That\u2019s right.\u00a0 If you\u2019re prepared, most audits can be concluded within a half hour.\u00a0 The less prepared you are, the longer the audit.<\/span><\/li>\n
  5. Gather your documents ahead of time and make copies<\/strong>. The audit letter or phone call will detail the documents needed.\u00a0 If you file payroll taxes, you will need your quarterly reports and annual W2 summary.\u00a0 You will also need any information in support of 1099 wages paid.\u00a0 If you have neither, then a summary of your check register or bank statements will be needed to identify all payments made for each labor classification.\u00a0 Keep in mind that the auditor is verifying and validating all payments made to laborers during the policy term.\u00a0\u00a0 (These payments will be organized into the corresponding class codes on your policy, and each category will be totaled.)<\/span><\/li>\n
  6. Request Certificates of Liability Insurance (COIs) throughout the year from any sub-contractors you hire<\/strong>. Asking for these copies along the way keeps you from scrambling at the last minute.\u00a0 Keep these COIs in a file and submit them to the auditor.\u00a0 Any payments made to sub-contractors who already have their own Work Comp policy coverage will be deleted from the category totals in #5 above.<\/span><\/li>\n
  7. Never ever, ever ignore an audit<\/strong>. The state of Georgia allows insurance companies to assess a 3X estimate of remuneration to businesses who are non-compliant with audits.\u00a0 This means that a $100,000 estimated payroll could soar to $300,000 assumed actual, if you don\u2019t respond to an audit in a timely fashion (usually 30 days).\u00a0\u00a0 Non-compliance can include anything that denies the auditor the opportunity to complete the audit:\u00a0 no documentation, failure to appear at the pre-arranged meeting, withholding information, etc.\u00a0<\/span><\/li>\n
  8. That\u2019s it<\/strong>. You\u2019ve completed your audit.\u00a0 Hopefully, if your actual totals are very similar to your estimates, your Final Premium Audit Statement will be $0 \u2013 nothing owed or refunded.\u00a0 Your policy will be renewed with few changes to class codes or remuneration.\u00a0 If you\u2019ve hired new classes of workers, the renewal policy will include these new class codes.<\/span><\/li>\n<\/ol>\n

    I tell my customers to be informed consumers.\u00a0 Know your policy!\u00a0 Compare the policy to your actual business activity throughout the year.\u00a0 If the insurance policy estimate<\/em><\/strong> of your annual \u201cpayroll\u201d is around $100,000 but business is picking up and you know the actual <\/em><\/strong>annual total will be more like $150,000 then put some money aside for the audit.\u00a0 Call us and we\u2019ll help you calculate the approximate premium increase.\u00a0<\/span><\/p>\n

    With a little knowledge, adequate preparation, and a relaxed attitude your next audit will be a breeze!\u00a0 And you might actually find that you enjoy<\/span> it wasn\u2019t so bad, after all.\u00a0<\/span><\/p>\n

     <\/p>\n

    Image by\u00a0ClipArts<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

    Just say the words \u201cWork Comp audit\u201d and watch any business person\u2019s stress level rise.\u00a0 Maybe the industry should replace the word \u201caudit\u201d with the phrase, \u201cverify and validate.\u201d\u00a0 That\u2019s…<\/p>\n","protected":false},"author":1,"featured_media":11574,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"yoast_head":"\nBoo-yah! for Work Comp Audits - First Newnan Insurance Group, Inc. | Newnan, GA<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/firstnewnan.com\/boo-yah-work-comp-audits\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Boo-yah! for Work Comp Audits - First Newnan Insurance Group, Inc. | Newnan, GA\" \/>\n<meta property=\"og:description\" content=\"Just say the words \u201cWork Comp audit\u201d and watch any business person\u2019s stress level rise.\u00a0 Maybe the industry should replace the word \u201caudit\u201d with the phrase, \u201cverify and validate.\u201d\u00a0 That\u2019s...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/firstnewnan.com\/boo-yah-work-comp-audits\/\" \/>\n<meta property=\"og:site_name\" content=\"First Newnan Insurance Group, Inc. | Newnan, GA\" \/>\n<meta property=\"article:published_time\" content=\"2016-06-10T18:01:05+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-04-17T23:00:31+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/firstnewnan.com\/wp-content\/uploads\/2016\/06\/8cxnEy5cp.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"814\" \/>\n\t<meta property=\"og:image:height\" content=\"684\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/firstnewnan.com\/boo-yah-work-comp-audits\/\",\"url\":\"https:\/\/firstnewnan.com\/boo-yah-work-comp-audits\/\",\"name\":\"Boo-yah! 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