Pay-As-You-Go Workers’ Comp Insurance
Business owners are finding a new solution to their workers’ compensation complications. Rather than stifle their administrative staff with painstaking audits or cripple their cash flows with large premium down payments. Many employers are taking advantage of payroll reporting as an alternative to workers’ compensation billing.
For years we have received the complaints of company CEO’s, especially those with large workforces or engaged in high-risk industries, as they were tired of the guessing game surrounding workers’ compensation premium calculations. Traditionally, workers’ comp insurance has been based on the amount of employee payroll that will be accrued during the upcoming policy period. The problem with this method, as many business owners understand, is that with so many variables and fluctuations in our changing market, it can be difficult to pinpoint exactly how much labor costs will be over a future period of 12 months. Therefore, company leaders have a difficult decision to make: Error on the side of caution and, while initially saving on the premium payments, risk under funding the insurance policy and owing additional premium 12 months later which immediately becomes due in full. Or alternatively, estimate labor costs liberally and handcuff cash flows during the year by overpaying for unearned premiums until the audit is completed and reimbursement can be processed.
The solution that we have applied for many company leaders is payroll wage reporting, or Pay-As-You-Go Workers’ Compensation billing. Pay-Go Workman’s Comp, as it is often referred to as, offers a simplistic approach to workers’ compensation insurance premium billing. Rather than estimate and true-up the policy premium amount in an audit, insurance carriers are allowing gross wages to be reported and billed on a per-payroll basis. Meaning that if your company processes employee payroll every week, then at the end of the week, the wages are reported to the carrier and the much smaller and more manageable workers’ comp premium cost is automatically charged to the company. This may seem like more work as there are as many as 52 payroll periods in any given policy period, however the service is automated and built into payroll service offerings. Moore Resources Insurance also offers access to third party administrators who will perform this service for a nominal cost so that there is little to no burden on the client. This not only alleviates the cash flow concerns generated by large down payments or full-pay policies, but it also provides piece of mind and ease of completion for the audit process. All payroll is automatically matched at years end and the audit statement is balanced with no loss of sleep or, better yet, funds from our clients.
There are multiple ways to take advantage of this system, and step by step instruction on how to set up your workers’ comp account on payroll reporting can be obtained by speaking with a Moore Resources Insurance Agent. Our business insurance agents specialize in many of the different programs that offer these services such as Payroll Automation, Workers’ Comp Billing Integrations, or PEO platform solutions. Call you Moore Resources Insurance Agent today to discuss the options available to your company.
Moore Resources is an Independent Insurance Agency located in St. Petersburg, FL and offering Homeowners Insurance, Auto Insurance, Personal Insurance and Business Insurance. Our reach extends beyond the Tampa Bay area to the entire state of Florida. Moore Resources has regionally been dedicated to serving the local residents of Pinellas, Hillsborough, Polk, Pasco, Manatee and Sarasota counties; including St. Pete, Tampa, Clearwater, Bradenton, Brandon, Dunedin, Gulfport, Lakeland, Largo, Lutz, Palm Harbor, Pinellas Park, Riverview, Ruskin, Seffner, Seminole, Temple Terrace, Tierra Verde, Town n Country, and the Gulf Coast Beaches.
The purpose of this blog is to present general information only. It does not interpret specific policies or coverage. In order to obtain detailed information regarding your insurance, contact a licensed insurance agent.