I realize that no business owner would answer “NO” to such a question, which is why I want everyone to know about a new way that some Workers’ Compensation (WC) Carriers are setting up premium payments.
The traditional way of WC is to estimate a whole year of payroll figures, report those figures to the carrier and then get an estimated premium. So what happens if the payroll numbers end up being different than the estimated payrolls? When the carrier audits the account at the end of the year, it will be determined if the business owes more money or if the carrier owes some money back to the business. Either way, it’s no fun to write a check to the carrier for a policy that has already expired. Nor does it feel good to know the carrier has been holding on to money that could have been used for the business, in the case of a refund.
If a business’ payroll fluctuates from month to month, or if there is a good possibility for growth throughout the year, then the payroll reporting option could be a great one. It is a simple concept that allows employers to report payrolls to the WC carrier at the end of each payroll period and pay premiums according to the reported amount. It is simple to set up and here are some of the added benefits:
- Improved cash flow by paying only what is owed during a payroll period.
- Elimination of large down payments. (usually at least 25% of estimated annual premium)
- Minimal audit adjustments, if any. Policies are still subject to audits.
- No late fee charges.
Every company’s situation is different, but as you can see, there are options for available.
How are you handling your workers’ compensation policies?
No comments:
Post a Comment