Workers’ compensation requirements can be overwhelming to business owners. Traditional workers’ compensation policies may not be the best fit for your company. Pay as you go workers’ compensation policy could be the best way to solve your needs. So what are the benefits of a pay as you go policy over a traditional policy? Pay as you go workers comp can provide an easier solution.
No upfront cost
Tradition workers comp policies require a large upfront cost based on estimates of what your total annual payroll. Pay as you go doesn’t require the upfront cost. Payments are made month to month.
Payments are based on actual data
For the purposes of workers’ comp insurance, payroll is the total gross payroll for all employees. This includes all salaries and wages, bonuses, commissions, and draws against commissions, plus holiday, vacation, and sick pay. With pay as you go workers compensation you’ll pay into the account in real time, and you’ll only pay exactly what you’re required. Payments are based on actual data so payments are accurate giving you the ability to better manage your cash flow month to month. This is extremely important when you have seasonal business cycles, payrolls that vary by job, seasonal highs and lows or a growing business.
No yearly audit
As mentioned, if you are a growing business, have seasonal business cycles, or seasonal highs you run the risk of underpaying or overpaying with tradition worker comp policy. Traditional policy premiums are audit at the end of the year. After the policy’s expiration, your insurance company may request a report of your actual payroll during the coverage period. If that number is different from the one on your application, you could be charged an additional premium (if you underpaid) or be given a premium credit (if you overpaid). Pay as you go eliminates the need for an audit because payments are based on actual data so payments are accurate and eliminate the yearly audit.
Companies compete
The cost of Workers’ Comp coverage depends on a number of factors, including the number of employees you have, the laws in the state(s) where you do business, the type of work you do (and the workplace risks it exposes you to), and more. As with other types of insurance, rates for workers’ compensation policies are calculated using several different factors. Pay as you go workers comp has multiple companies they work with to get you the best policy and get you the most competitive rate for your business.
Real time reporting
With pay as you go workers comp you can review the reports in real time. No longer waiting till quarterly reports to get an accurate look at premium payments, claim data, and more. Monthly reporting helps match the insurance expense to the monthly payroll activity. Best of all the payroll company is responsible for reporting your monthly payroll to calculate the updated workers’ compensation premium and remitting payment to the carrier. This saves you time by eliminating audits and letting you manage your information quickly. In short, pay as you go workers compensation is the best way to solve your workers compensation needs. You can just focus on your business, and on your core business needs while the reporting is taken care.
These benefits of pay as you go workers compensation encompass all of the above and more. Pay as you go workers compensation saves your company money by eliminating audits and up-front payments, and saves you time by eliminating audits and letting you manage your information quickly. In short, pay as you go workers compensation is the best way to solve your workers compensation needs. Workers compensation is required by law, and pay as you go workers compensation offers you the best way to stay compliant.