Premium Audit Disputes and Collection Agency Warning
Friday, January 24, 2014 | 0
Since the first of the year, we have received a large number of inquiries from employers with premium disputes. I am not sure if insurance carriers by contract can do this - but a large number of disputed bills are being forwarded to collection agencies for final collection. This seems to be an ever-increasing trend.
There are a few ways to avoid this situation:
- Pay any undisputed part of the bill. One of the conundrums in disputing a WC audit bill is establishing how much your company owes the carrier that is not in dispute. Every workers' comp policy has a clause in it that requires payment of the undisputed premium.
- Just to be safe, it is recommended that you respond to the credit bureau by certified return receipt mail as soon as possible and cc: the carrier's audit department.
- If the carrier's collection department also sends your company a request for payment, respond to them ASAP in writing with certified return receipt mail, regardless of any collection agencies.
- Do not use the audit premium dispute process as a way to delay paying a bill that your company actually may owe. This will ruin your relationship with your agent and the carrier.
One of the big mistakes is to let a collection letter from a collection company sit or destroy the letter. If you look at usually the back of the letter it will say that your company must respond to them and not the carrier within so many days. If you do not, then you may have admitted that the debt is valid.
I am not a credit and collections expert. I am only warning you to respond to any collection letters in a timely manner, or you may end up owing a premium dispute debt. Calling the collection agency is basically worthless as you have no documentation to back up anything you have told the collection agency.
We have had two companies call us where they did not respond to the collection agency's letter. The collection agencies are now saying they are in default of a debt and must pay it. The main reason that this happened in both cases was the employers threw away the collection letters.
James J. Moore is owner of J&L Risk Management Associates, an employer-consulting firm in Raleigh, N.C. This column was reprinted with his permission from his Cut Comp Costs Now blog.
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