Premium Audit Process
What is a premium audit?
When a workers’ compensation policy is purchased, the premium on that policy is estimated based on your business operations and exposures. Throughout the life of the policy, those exposures and payroll might change, resulting in a higher or lower premium. During a premium audit, which is conducted at the expiration of the policy period, actual exposures and classifications are compared to what was estimated to determine the final premium.
We understand that the word ‘audit’ can sound daunting, but rest assured, our team will be there to guide you. And, in some cases, audits actually save our customers money, which is another reason it’s such an important part of the work comp policy process!
How are premium audits completed?
All workers’ compensation policies require a premium audit – there are various ways they can be completed.
- Online audit – Simply log into our secure portal using your provided ID and password to input audit information. Note that not all policies qualify for online audits.
- Mail audit – An audit form is completed and returned with the required supporting documentation via mail, email or fax.
- Phone audit – The completed audit form and supporting documentation are reviewed with a member of our audit team over the phone.
- Virtual audit – Using a virtual setting (e.g., MS Teams, Zoom, etc.), we’ll review the audit records with you.
- Physical audit – A meeting is scheduled with one of our auditors to review audit records, operations and documentation at your business location.
Here are some common records and documents needed to complete the audit:
- Payroll records
- State and Federal tax reports
- Job duties for employees, principals and subcontracted labor
- Total cost paid to subcontracted/1099/cash labor
- Certificates of workers’ compensation insurance for subcontractors
- Cash disbursement journal and/or check registers
- Income statements and general ledger entries
Note, this list is not conclusive; we will alert you of the specific records needed for your audit.
Examples of requested forms:
What is an audit noncompliance charge (ANC)?
To comply with state bureaus and the National Council on Compensation (NCCI), AF Group applies an audit noncompliance charge if a policyholder does not comply with the request for a premium audit. Please refer to your policy for details regarding the ANC Charge. The ANC charge varies by state.
Please note: In order to have the ANC charge removed, please complete the Dispute Form and provide all request documents.
Frequently Asked Questions
Accident Fund Forms
*For qualifying audits per company guidelines.
Watch a video tutorial on completing an online audit*.
*Online audit completion is available for qualifying policies per company guidelines. Applicable insureds will be notified accordingly upon policy expiration.
Premium Audit Contacts
PO Box 40790 – Lansing, MI 48901-7990