The annual premium audit (sometimes known as the payroll audit) determines your company’s actual Workers’ Compensation insurance premium for the policy period, as opposed to the estimated premium originally used on the policy
Every Workers’ Compensation policy, regardless of billing type, receives an audit from its insurance carrier at the end of the year.
However, not all audits are equal. Clients who use a Workers’ Compensation “Pay as you go” policy will find that their annual audits could be considerably faster, more efficient and less cumbersome and invasive than a traditional, direct bill audit.
Direct Bill policies are almost always physically audited on site. That means that the policyholder must take their time to track down their payroll data for the entire year, followed by an in-person audit, which can time being spent on non-revenue generating functions of your business.
With a Priority One Payroll’s Pay as you go Workers’ Compensation, provided by AP Intego, most audits require no involvement from the policyholder, since AP Intego has been sending payroll data to the insurance carrier every pay cycle throughout the year. And even the most labor-intensive PAYG audits are usually carried out over the phone and not on-site.
The insurance companies are required to audit each policy – failure to respond to a workers’ compensation audit can result in an increased premium or policy cancellation for failure to respond.
Click here if you would like more information about Workers’ Compensation Audits from the NYS Workers’ Compensation Board.