Every business that has employees and a workers compensation policy can relate to the panic generated from the anticipation of the dreaded annual audits (sometimes more often, depending on the policy).

There is much confusion about how the audits work, especially if you partake in Payroll Billing, commonly known as “Pay-as-you-Go” billing. Many of our Accuchex Payroll clients, who also use our Insurance Services, take advantage of Payroll Billing on their Work Comp policies.  Various carriers call their Payroll Billing by names such as Payo, PrecisePay or Xactpay, but they all describe the same process of paying premium based on the frequency of your actual payroll.  After each paycheck date, reports are generated and sent to the carriers, who then deduct the exact premium as an EFT directly from your account.

Benefits of Payroll Billing for Workers Compensation Payroll Audits

The benefit? First, this helps a lot with cash flow, by eliminating the large deposits and quarterly payments required on non-payroll billing policies. Second, if your payroll increases or decreases during the year, you won’t have to worry about over or under-paying your premium at the end of the term thus reducing the risk of surprises (owing additional premium) at audit time, making the process a little easier to bear.

One of the most frequent assumptions from our Payroll Billing clients is that since they do their payroll and insurance with Accuchex, they won’t have to go through the audit process. Unfortunately, there is no way around the audit process on a work comp policy. The carriers require labor distribution reports, 941 Quarterlies and possibly other documentation to compare your actual annual payroll to your estimated amount. As an Accuchex Payroll client, this process is more streamline, since you can easily pull the 941 and Labor Distribution reports you need in Time2Pay to submit when the audit requests come in. If you need assistance, simply ask your CSR!

Payroll Billing clients have the advantage of knowing that even if they miscalculated their estimates at the beginning of the policy term, they have been paying the premium based on whatever the actual payroll was for the term, so they won’t be surprised with a large additional premium due in a lump sum (on top of the renewal’s premium). If there are differences, it is minimal.

If you are interested in having Accuchex provide a quote for your work comp policy (renewal or upcoming), we would be happy to find competitive coverage and see if you are eligible for Payroll Billing.  You can contact Amy at 877-422-2824 or amy.bellin@accuchex.com.