Reversing Workers Compensation Insurance Mistakes Since 1999
Average Refund: 10-15% of Your Annual Premium
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Understanding Workers’ Compensation Costs
Recovering Workers' Compensation Costs
The methods for calculating workers’ compensation insurance premiums requires collaboration between your company, insurance companies, agents, and workers’ compensation bureaus. Basic statistics show that the more people involved in a process, the more mistakes can be made. These mistakes cost your company money every year.
Calculating workers’ compensation insurance costs involves a very complicated classification system created by the National Council on Compensation Insurance. (NCCI is the largest provider of workers’ compensation and employee injury data in the United States.) NCCI’s system involves well over 2,000 classifications (when you consider all the state-specific classes).
If your business operates in multiple states, this further complicates things. Some states do not even use NCCI’s classification system, but have created their own. For example, the Texas workers compensation system has its own rating bureau run by their Department of Insurance. In the states where these audits are conducted, the methods for computation are spot-checked, not thoroughly investigated. These states have reported 30 to 40 percent error rates after NCCI’s audits.
Even though most workers’ compensation insurance companies perform a yearly audit, working with a private auditing company will save you money. The insurance company’s auditors do not look for overcharges. They are simply there to ensure that estimated payroll numbers match actual payroll numbers. Consider hiring a workers’ compensation “watchdog” to look over your company’s policies and point out the areas in which you are paying too much.
In this volatile economy and America’s capitalist culture where every man is only looking out for himself, it is imperative that all employers protect themselves from workers’ compensation bureau and insurance company mistakes. After all, the insurance companies are always looking for ways to get out of paying out their share.
If you think your insurance agent is looking for ways to save your company money, think again. With limited time and resources, it is quite unlikely that your agent is reviewing the more than 40 areas most likely to have an overcharge.
Working with a private auditing company could save you 10 to 15 percent of your annual premium. Many of these companies can review your classification codes and premium audit calculations for the past five to seven years. This increases your potential refund significantly. Be sure to work with a company that does not charge you anything unless they are able to recover your overage fees and decrease your workers’ compensation costs.
