Are You Throwing Money Down the Drain on Workers Compensation Insurance?
How to Check your Workers’ Compensation Audit, in 20 minutes or LESS!
Give your Workers Comp Audit a test run to find out.
One of the biggest tragedies in business life is that many employers think that checking their Workers’ Compensation Audit or policy is either too complicated to do, or not worth the trouble. Nothing could be further from the truth!
Granted I have been specializing in the iWork Comp nsurance business for over 30 years, but this is something that anyone smart enough to operate a small business today, can easily accomplish. Let’ me help you take the mystery out of it! Within 20 minutes you will have a good idea if there is anything for you to pursue. I’ll wait a second, while you go get your audit and calculator.
Step 1: Pull out your Work Comp Audit (or original policy). Either the declarations page or the payroll schedule should show you the payroll, calculations, and the class(es) used. The payroll class(ification) should have a description of the job performed by the employees covered by the payroll used.
For instance, if you are a service station, your class will be AUTO SERVICE OR REPAIR (NY code 8391 - costs $3.78 per hundred of payroll right now in NY).
If the payroll is charged for a bookkeeper or office employee, it will be CLERICAL (NY code 8810 - costs $.24 per hundred of payroll right now in NY).
If you have the code name, or the class number, you can go to this page and reverse lookup either one ( http://www.nycirb.org/ ). This page is from the NY Compensation Insurance Rating Board. The code numbers and class names are used in 40 states of the Union. Most likely, they will apply to you.
As far as the actual rate goes, that is state specific, and if I may offer a little editorial comment, VERY political. I will use and refer to the rates in effect in NY for the rest of this article and you may search your states reference to fine tune your numbers.
STEP 2: Are the classifications accurate? If you ARE a service station, and you have mechanics, counter people, and someone in the office, you should have a separate class listed, for each position! Don’t let your insurance carrier misclassify your employees. Seems like a small issue?
Well, I happen to have crossed paths with an Auto Repair Garage and found my best example. We went back 3 years (the maximum) and instead of having to pay $19,000 that year, after return premiums, they paid just under $400. For the year! This is NOT a misprint, it was an actual situation. Needless to say, they were happy to have found me. It was something their former agent SHOULD have done.
STEP 3: Are the Payrolls roughly accurate for each class? Check them at the same link above. See how easy this is? This is why audits are done. Many times a business will make changes throughout the year. Some changes will increase the payrolls and some will decrease them. But your estimation of the payroll should be a “best guess” when the policy starts. The audit will just clear up any of these changes.
That’s about it! How long did it take? You may have other factors affecting your premium, but these are the biggest and most common factors where mistakes are made. Now let’s say you found an error in your Work Comp Policy or Audit. Who did you buy it from? They should be able to help you make corrections.
If you bought it from the State Insurance Fund, Iwhich is where the most issues seem to be, I would recommend you find a friendly insurance agent, appoint them your representative and ask them to do it. They may charge a fee, as the SF doesn’t pay any commission.
But hopefully you bought it from someone who cares about your business more than that. This is a regular problem with the State Fund. Reason being if they have the slightest problem in conducting your audit, they will double your payroll and bill you for it. When you scream they take care of it in a couple months. Hope you can wait. And they will make you feel as if it is your fault. I have seen them not be able to get to an audit for weather reasons and do this to innocent businessmen. Ain’t right, but that’s your State Fund.
As the the other factors? We go into those in other related articles, including the portions of payroll that are excluded from Workers Compensation.
Stop by WorkersCompWizard.Com/ and see if we answer your Workers Compensation related question. It’s written by G R Devendorf, an agent who specialized in Workers Compensation for over 30 years. Make that 35+ Years. He knows the trick each side plays and isn’t afraid to use them to your benefit. He is retired now, so don’t expect a big sales presentation. You must be all broken up by that, but it’s true.
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Posted under Workers Comp Audit Problems
