Payroll, Here Are Your Articles for Wednesday, March 30, 2022
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Is This Your Situation: Considering Pay-As-You-Go Workers' Comp Insurance


Pay-as-you-go workers' compensation insurance is designed to smooth out the premium changes that occur during the year as employees come and go.

  • Premium payments are made at the end of each payroll cycle and are based on the actual payroll cycle, so there's no need for adjustments at the end of the policy year.
  • Companies don't have to deal with estimates and cash flow surprises.
  • Companies don't have to put down much money and can spread out payments over the course of the policy year.
  • Required audits require little to no involvement by the employer. Since the policy is based on real-time payroll wages, the insurance carrier already has the information it needs.
  • Pay-as-you-go insurance is available in a large majority of states.

Letting someone else do the work

Of course, no matter how simple the product is, you still have to spend time managing it. So consider the advantages of outsourcing your workers' comp insurance administration, such as:

  • Audit assistance. Even though pay-as-you-go audits may be simpler compared with conventional policies, it can still be a headache. A third-party can help you with this and work directly with the insurer to make sure you don't pay more than you should.
  • Calculation hassles offloaded. You may find that premiums are based on varying class codes, locations, overtime, rate of pay and a host of other variables unfamiliar to those outside the insurance industry. An outside insurance professional can do all these calculations for you.
  • Deadline management. Meeting the myriad federal and state tax deadlines is already a headache. A third party can make sure you make all your premium deadlines.
  • Consolidation of insurance. Depending on the kind of company you have, you may have other business insurance. A third party may be able to handle all your policies, giving you just one point of contact.

If you're frustrated and overwhelmed by workers' comp insurance, give us a call and we'll be happy to help.

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Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
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