The document answers frequently asked questions about the ANC (Alternative Non-Compliance Charge). It explains that the ANC is not mandatory but employers must follow conditions if they use it. Non-compliance is determined if employers do not keep and provide records to carriers. The amount is based on estimated annual premium to encourage providing records for audits. The ANC is subject to state guidelines and taxes. If still non-compliant, coverage can be cancelled or denied until records are provided, even if the ANC is paid. Records needed may include financial documents under NCCI instructions.

1. ANC 101: YOUR
QUESTIONS
ANSWERED
BROWN & JOSEPH, LTD.

2. No, it’s up to you to decide whether to use it or not. If
you do, you must follow the conditions provided by the
ANC rule.
IS THE ANC
MANDATORY?

3. Employers are considered noncompliant if they do not
keep records and provide those records to carriers.
Failing to do so is going against the provisions of the
policy. Additionally, employers must allow carriers to
examine and audit all records during the policy period
and within three years after the policy expires.
HOW DO YOU
DETERMINE
NONCOMPLIANCE?

4. The basis of the charge is estimated annual premium.
The goal is to encourage the employer to provide
access to the records needed to conduct the audit.
HOW IS THE
AMOUNT
DETERMINED?

5. The ANC is subject to state-specific premium-based
assessments, surcharges, and taxes because it is a
premium charge.
WHAT ABOUT
STATE-SPECIFIC
GUIDELINES?

6. If an employer continues to be noncompliant, the
insurance company can cancel the workers’
compensation coverage. Noncompliant employers will
be disqualified from obtaining coverage from any
insurance company until the outstanding audit is
completed. Additionally, an employer that pays the
ANC without providing records may still be subject to
cancellation or nonrenewal of workers’compensation
coverage.
WHAT IF THEY
STILL WON'T
COOPERATE?

7. The auditor will provide instructions on what records
are needed, how to submit them and when they need
to be submitted by. According to the NCCI, these
records may include journals, ledgers, contracts,
registers, payment vouchers, tax reports, payroll
records and disbursement records.
WHAT RECORDS
ARE NEEDED?

8. STILL HAVE QUESTIONS?
BROWN & JOSEPH, LTD.
WWW.BROWNANDJOSEPH.COM
(800) 444-8255
SALES@BROWNANDJOSEPH.COM