Page 2 - SIB Whitepaper - Workers' Comp Audit

Super ciallyatleast,workers’compensation is a spending area that seems to have largely been taken out of the control of employers, easily manipulated by sophisticated insurance procedures and the enormous resources of the powerful companies enacting them. But you will learn that a proactive outlook and a full awareness of the audit processes of insurers can arm you with the assurance that you are being audited properly and can eliminate the worrying specter of a major future shock.
THE BASICS
The cost of insuring your business, especially workers’ compensation costs, can be harrowing. You may have every safety measure and OSHA standard in place to protect your employees, but you’re still required to carry insurance – even if you’ve never had a claim. Each year, workers’ comp insurers return to audit your payroll, your experience modi cation rates, and your use of outside contractors to ensure that your current policy is adequate for your business and to make sure you paid enough for the prior policy year. These audits are often complicated and time-intensive for the team that needs to prepare the necessary
“A legacy of shock audits – retroactively adjusted premiums astronomically higher than a policy’s initial cost – has caused employers both small and large to feel powerless.”
This whitepaper will discuss workers’ compensation, an expense frequently perceived to be outside of employers’ control. Providing workers’ compensation has become an especially dreaded cost for employers because insurers have the capacity to charge exorbitant adjustments to premiums long after a policy’s e ective date has ended, rendering the initial cost of a policy essentially meaningless and its real cost at the time of purchase impossible to fully determine. A legacy of shock audits – retroactively adjusted premiums astronomically higher than a policy’s initial cost – has caused employers both small and large to feel powerless, subject to seemingly arbitrary costs for policies that have long since expired. This paper will demystify the auditing process that leads to such overwhelming and unwelcome surprises by way of leading to an empowering suggestion: to protect yourself, you must audit your auditors. It is vital that you understand how insurance companies conduct their reviews of your business to maximize their potential extractions for workers’ compensation premiums. You can, in turn, carefully review their actions and potentially save your company millions.
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WORKERS’ COMPENSATION AUDIT • © 2017 SIB FIXED COST REDUCTION