Workers compensation audits ensure you’re paying exactly the right premium for your coverage. At MEM, we conduct audits using two formats designed to match different business needs and complexity levels. 

Your Premium Consultation team selects the format that works best for your policy based on factors like business size, number of class codes, and operational complexity. Here’s what you need to know about each format and what to expect. 

The two audit formats 

e-Audit (online portal) 

An e-Audit allows you to complete your audit through a secure online portal. This self-service format is designed for straightforward policies with simpler structures that can be easily self-reported. 

What to expect: You’ll receive an email with a unique PIN and passcode to access the portal. From there, you can log in at your convenience, upload the required documents, and submit your audit information. We’ll only contact you if we need to clarify any information based on what you’ve submitted. 

Benefits of this format: e-Audits eliminate the need to coordinate appointments. You can complete the process on your own schedule, whether that’s during business hours or after closing. The online system guides you through each step, making the process straightforward for policies that don’t require extensive consultation. 

When you receive an e-Audit request, our detailed instruction guide takes you through the online process step by step: How to Complete an e-Audit > 

Remote audit 

A remote audit involves working directly with your Premium Consultant via telephone. You’ll be asked to submit documentation online before your scheduled call, and your consultant may also collect information during the call. 

What to expect: You’ll receive a notification to schedule a phone call with your Premium Consultant. Before the call, you’ll submit records through our online portal. During your conversation, your consultant will ensure all the necessary information is captured and answer any questions. 

Benefits of this format: Remote audits provide one-on-one guidance from a Premium Consultant. Your consultant can walk you through questions about classification codes, help identify potential credits, and ensure complex payroll situations are handled correctly. You get the convenience of submitting documents online combined with the expertise of a dedicated consultant. 

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Which audit format will I receive? 

MEM assigns audit formats based on your specific policy details. We consider several factors, including: 

  • Policy size and estimated premium 
  • Number of class codes 
  • Business complexity and industry 
  • Type of operations 

This assignment process ensures you receive the right level of support for your situation. Straightforward policies with fewer variables are well-suited for e-Audits, while policies with multiple class codes or complex payroll structures benefit from the consultative approach of a remote audit. 

Have questions about your assigned format? Contact our Premium Consultation team. 

Preparing for your audit 

The documents you need for your audit are the same regardless of which format you receive. You’ll typically need: 

  • Payroll records: Quarterly and annual wage statements, payroll summaries 
  • Tax documents: Federal and state tax forms, including 941s and state unemployment reports 
  • Subcontractor documentation: Certificates of Insurance for any subcontractors used during the policy period, along with payment records 
  • 1099 forms: If you paid non-employees during the policy term 

Get organized before your audit notification arrives. Make sure you have the right documentation with our Audit Preparation Checklist. > 

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The audit timeline 

Understanding the audit timeline helps you plan accordingly. Here’s what to expect after your policy expires: 

Initial notification: You’ll receive your audit notification within 10 days of your policy expiration date. This notification includes your assigned format and instructions for next steps. 

Reminder notification timeline: You’ll get up to three additional notifications: 

  • Initial notification at 0-10 days post-expiration 
  • Reminder 7 days before your appointment 
  • Final notice around day 40-45 if your records aren’t received or you miss your appointment 

Explanation of Audit: Regardless of format, you’ll receive an Explanation of Audit once the process is complete. This document outlines any premium adjustments – whether you owe additional premium or receive a credit. Not all audits will result in premium adjustments. 

Complete your audit with confidence 

Your audit ensures that your work comp premium is accurate and fair. Whether you’re navigating the online portal or discussing your payroll with a consultant, the goal remains the same: confirming you pay exactly the right amount for your coverage. 

Questions? Contact Premium Consultation at premiumconsult@mem-ins.com or 800.442.0595 ext. 4255. 

Premium audit FAQs 

  • Your business is constantly changing. Our premium consultation services ensure premiums are paid based on actual payroll as it evolves and grows. We conduct state bureau-required audits for customers to verify correct payroll and classification information. This allows us to help you account for business changes like employee turnover or growth.

    In short, this year-end audit ensures you are paying on your actual payroll and risk exposures.

  • At the inception of your work comp policy, your premium is estimated based on estimated wages. We calculate your actual wages at the end of your policy period. One of our consultants conducts the audit via phone, mail, online, virtual, or a physical visit to your site. How your audit is completed depends on several factors, including your company’s size and potential exposures. 

    For some new policyholders, we perform a new business consultation within the first three months of the policy. This is an excellent opportunity to ask questions about payroll classifications and records to ensure proper classification and avoid surprises (like higher-than-expected rates) with the final audit.  

  • We complete state-required audits and follow the rules and regulations for determining work comp premiums established by the National Council on Compensation Insurance (NCCI) and approved by state insurance regulators.

  • Good record-keeping can save your business time and money during the audit process. At the beginning of the process, your consultant informs you precisely what records you need during the audit. View our Audit Checklist to help you plan for your audit in advance.   

  • Gross wages can include any pre-tax deductions; salary, hourly, commission, bonus, piecework, overtime pay, vacation, holiday, sick, incentive pay, housing, and car allowance, whether in money or otherwise. 

  • Yes, your Premium Consultant will give you some additional time to obtain the appropriate certificates of insurance (COI). However, requesting a certificate from a subcontractor when the work is performed rather than during an audit is recommended. If a valid COI is not obtained, the subcontractor will be included in the audit,and an appropriate premium will be assessed.

  • The audit must be processed within 120 days of policy expiration per insurance regulations. You can expect to receive the results within 2 to 3 weeks of the audit appointment.  

    During the audit appointment, your consultant will discuss differences in the audited payroll versus the estimated or reported payroll. This is an excellent opportunity to ask questions and ensure you understand any discrepancies.  

    Once the audit is submitted, an Explanation of Audit (EOA) is generated, reflecting the final premium determination and any adjustments to payroll or class codes. Copies of the EOA are mailed to policyholders, emailed to agents, and are available in the portal. 

  • The audit process is complete. If the audit results in a bill, you will receive a new billing statement with the amount and the due date. You also receive a new billing statement displaying the credit amount if the audit results in a credit.

  • Yes, we offer payment plans on audit balances. For an audit payment plan, please contact Customer Care at 800.442.0593 or customercare@mem-ins.com.  

  • Policyholders and agents can contact Customer Care at 800.442.0593 or customercare@mem-ins.com to obtain audit worksheets.

  • First, contact your auditor to discuss the audit results. If you still disagree with the audit findings, submit a detailed explanation/description of your concerns and any supporting documentation to premiumconsult@mem-ins.com.  

    The audit may be reopened and reviewed by an auditor or audit manager. In the meantime, if you receive an audit billing statement, the amount and due date remain the same until the review is complete. The dispute of an audit does not delay the premium due date.  

  • A voluntary audit is when an audit is closed using the estimated payroll figures initially provided by your agent. However, if you prefer an audit using your actual payroll figures, email premiumconsult@mem-ins.com to help you through the process. 

  • Per NCCI rules, if you do not comply with the audit, you may be charged an Audit Noncompliance Charge (ANC), and the policy may be subject to cancellation.  

    The ANC allows insurance companies to charge up to two times the initially estimated premium when a policyholder is non-compliant with a work comp policy audit request. 

    • Exposure: Refers to payroll.
    • Payroll: Money or substitutes for money, payable by the employer for services of individuals who could receive workers compensation benefits.
    • Premium: Dollar amount charged for coverage based on payroll calculated on applicable classification codes and rates.