The MA Workers’ Comp Test Audit Program

By: Debra Gerraughty, CISR, CRIS, CPIA

Debbie has more than 28 years of experience in the insurance industry. She enjoys working in the Commercial Lines Department learning new information every day and helping her customers.

Does your Massachusetts business maintain a workers’ comp program?  If yes, the following announcement from the WCRIBMA pertains to you. Keep reading to learn about the MA workers’ comp test audit program…


WCRIBMA is the Workers Compensation Rating & Inspection Bureau of Massachusetts. The WCRIBMA is a non-profit group of insurers, tasked by the state to rate workers’ comp insurance. They collect policy information, claims information, and financial data from all the carriers licensed to sell workers’ compensation insurance in Massachusetts. They issue experience mods and classification rulings for employers in MA. They also act as the statistical agent and the Assigned Risk Pool Administrator for the Division of Insurance, and they are the coverage verification entity for the Department of Industrial Accidents.

What is their test audit program?

The test audit program will basically be an audit of the current auditing process. The WCRIB is checking for accuracy in terms of how classifications, rates, and rating plans are applied—making sure carriers are following the rules.

How does this affect my company?

You should be aware that in addition to the annual audit of your workers’ compensation program, you may also be audited an additional time over the course of the coming year. We know that audits can be time-consuming, intrusive processes that interrupt your business as usual. If there’s anything we can do to help you prepare, please let us know.

Am I going to get audited?

We can’t say yes or no. It is possible that your company will be on the list of businesses the WCRIB test audits this year. Policies of all sizes and from all different industries will be selected, so it doesn’t matter how big or small or “high risk” your operation is. If you are selected, this audit process will happen in addition to the annual audit you experience every year.

NOTE: There are some businesses that definitely won’t get audited—including those who have been test audited within the past five years, those whose comp insurance is part of a wrap-up or OCIP, those who are temporary staffing contractors, and those with “per capita” classifications.

When does MA workers comp test auditing begin?

Test auditing will begin in January of 2019. On the first of each month, the WCRIB will provide insurance carriers with a list of policies that have been selected for audit. Generally, the policies will be selected in order of their workers’ compensation insurance renewal dates. So, for companies whose policies renew in March, carriers would be notified around the first of January; the companies themselves would then be alerted by the first of February.

How will I know if my company is getting test audited?

Your insurance carrier will notify you.

Is there anything I should be doing right now to prepare for a potential test audit (or regular annual audit)?

As always, it helps to gather the necessary documents ahead if any audit. We recommend gathering the following:

  • Payroll records (employee specific)
  • Unemployment tax returns
  • Form 1040 Schedule C (if sole proprietor)
  • Tax reports (Federal Payroll 940s or 941s)
  • General ledger, subcontractor ledgers and journal (or 1099s)
  • Certificates of insurance for subcontractors
  • Workers’ compensation (WC) insurance policy
  • Employee information (compiled here)
  • Corporate officer information (compiled here)
  • Audit package totals (compiled here)
  • Subcontractor information (compiled here)
  • Certificates of insurance for each subcontractor

Other workers’ comp audit prep tips:

  • Make sure that your records document the actual gross payroll spent by each employee in different workplace exposures if employees are involved in a variety of operations. Do not estimate payroll. Gross payroll should be provided with monthly and quarterly or year-to-date totals by employee and department. The type of work performed and the job duties by each person must be shown. This includes officers, members, sole proprietors and partners. If your records do not break down payroll by different workplace exposures, the auditor will classify it under the most expensive classification applicable.
  • Have workers’ compensation documentation including certificates of insurance for 1099 independent or subcontractors showing that they have their own insurance (if applicable). If you do not have this information, the auditor will charge your company the premium charge for this exposure.
  • Review payroll documents to highlight overtime pay for the auditor so he/she can discount it back to normal pay. The auditor won’t take the time to complete this step on his or her own.
  • Review the classification codes assigned to your job contacts. Some individual jobs may be subject to different codes. If the auditor cannot locate this information, he/she will need to review your invoices.

Still confused? Please don’t hesitate to contact us with any questions or concerns: 508.339.2951.

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