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Workman's Comp Insurance Audit

Discussion in 'Business Fundamentals' started by KAG, Jan 5, 2009.

  1. KAG

    KAG Senior Member
    Messages: 114

    Got a phone call from my old Workman's Comp insurance company telling me I was randomly selected to be audited. They want to set up a face to face audit time and want me to turn over all my business financial records for 2008. The policy in question expired a month ago and I now use a different company.

    I told them no, that I thought workman's comp is based off of wages paid and I can turn over just the copies of W-2's of my employees for the time the policy I had with them was in effect and mail them in but I did not see why it had to be face to face.

    They said it was to see if I was due a refund on my premium I paid but I know its to see if they think I owe them more now that I did not re-up with them.

    Anyone have any experience with this?
  2. JDiepstra

    JDiepstra PlowSite.com Addict
    Messages: 1,780

    No experience but sounds like a fishy deal for sure. Insurance companies are hurting bad right now and my butt they are trying to give out extra money!
  3. I don't know about workman's comp but I know that here Revenue Canada can come in and audit anytime they want without your OK. I highly doubt workman's comp can do this though. I'd call them and ask for a manager and discuss it.
  4. JDiepstra

    JDiepstra PlowSite.com Addict
    Messages: 1,780

    What is Revenue Canada? Like the IRS in USA? A gov agency?
  5. WMHLC

    WMHLC Senior Member
    Messages: 248

    It's no big deal. My insurance company does it every year. They just check to make sure you have enough coverage. If you have to much they will mail you back a check for over payment.
  6. Sorry its the same as your IRS. They regulate all of our paid and unpaid taxes.
  7. Camden

    Camden PlowSite Fanatic
    Messages: 6,604

    Let me tell you how this is going to go because I have been through this. They have NO intention of giving you a refund. They are going to tell you that you were undercharged while you were covered by them and they're going to want THOUSANDS extra for what they're going to call "unpaid" premiums.

    They're going to say that the amount you were paying was just an estimate and they need to do this audit for an accurate accounting. If you read your policy carefully you'll see that you agreed to this.

    It's an absolute scam if you ask me but I signed on the dotted line not knowing what all of that language really meant. My old company claims I owed an additional $5000 and after a lot of correspondence back and forth they have given up trying to collect.

    My new work comp company has told me that they will do audits from time to time but that they'll never come back and say that I owe money from previous years as long as I continue to give them accurate information up front.
  8. KAG

    KAG Senior Member
    Messages: 114

    I figured it was to try to get $$ out of me.

    So in your opinion its ok to tell them to "go pee up a rope"?
  9. JDiepstra

    JDiepstra PlowSite.com Addict
    Messages: 1,780

    I have never heard "go pee up a rope" but if it is similair to "go pound sand" then yes tell them that.
  10. Turbodiesel

    Turbodiesel Senior Member
    Messages: 428

    Thats not random , believe me. Someone you were doing business with whether it be an employee or client , got into a situation . Think hard.:dizzy:

    It may be in your best interest to notify your attorney / accountant about this.
    Last edited: Jan 5, 2009
  11. Eronningen

    Eronningen Senior Member
    Messages: 447

    Don't get carried away guys. I get audited every single year and I just figure on it. Most larger Comp and GL companies do this especially with larger companies/payrolls.
    Do you pay based on an estimated yearly payroll or do you pay on reporting forms monthly based on what your payroll was? Either way they need to verify that your estimate and payments were correct, since work comp is based on payroll totals. Its not just a lump sum ins. Also, many companies, myself included have many different class codes, ie; street cleaning/snow removal, clerical, sales, roofing, carpentry, etc. each carrying their own seperate rate. They also need to see that broken down at audit time.
    I assume the reason they are auditing you if they have not before is because you did change carriers and that is perfectly normal.
    As far as the assumptions that they will screw you and you will owe thousands.....come on guys, it goes both ways. Some years I am refunded and some years I owe tens of thousands, depends on my estimates. If I owe that means I had a good year and under estimated/under paid. The refunds I have gotten have been from the opposite.
    I suggest you comply.
  12. festerw

    festerw Senior Member
    Messages: 986

    We had one every year, got 8K back year before last. IIRC all they wanted was payroll and who did what, for example an office worker is less to insure than a laborer, I'm sure this differs per company though.
  13. Eronningen

    Eronningen Senior Member
    Messages: 447

    What do you mean by this?
  14. Turbodiesel

    Turbodiesel Senior Member
    Messages: 428

    You get audited every year ? Never heard of that happening....large or small company . :rolleyes::cool:
  15. Eronningen

    Eronningen Senior Member
    Messages: 447

    I don't know what you would consider large or small. I consider us medium. Gross revenue over 1 million.
    But this has been the norm over the last 5-6 years where sales were below 500k.
  16. ERCKWD

    ERCKWD Member
    Messages: 32

    We too get audited every year. When they call I break down the employees hours/positions, separate the overtime and reg. time chart them out and give the WC auditer a copy. Usually have no problems.
  17. KAG

    KAG Senior Member
    Messages: 114

    Well no matter what all they will get is W-2 info if push comes to shove and not complete financial books. That in my mind is too much info for their needs. No face to face time either.
  18. Eronningen

    Eronningen Senior Member
    Messages: 447

    Do you have more than one class code? If so you should consider breaking it down into codes because if you do not they will put all the payroll into the higgest rate code and then you will be losing money for nothing. If not than maybe W-2's will work.
    There is nothing to worry about being face to face, they don't interogate. They are just looking for someone to hand them what they need. Most of the time I just prepare the info or have my accountant prepare it and either they or I meet with the auditor. Not a big deal.
  19. Eronningen

    Eronningen Senior Member
    Messages: 447

    Thats exactly what we do.
  20. Turfmower

    Turfmower Senior Member
    Messages: 376

    We get audited every year the amount you pay is based off you actual payroll. you need to beak down regular time and over time. you all so need certificates of insurance of any subs you had work for you. It is not a big deal unless you gave them a low payroll figure when they wrote the policy.