What is Pay-As-You-Go Workers Comp Insurance?

what is pay as you go workers comp insurance

For most businesses, some form of pay-as-you-go workers comp insurance is a no-brainer.

Pay-as-you-go workers comp insurance capitalizes on the synergy between your business’s payroll and workers’ compensation premiums.

With standard workers’ comp programs you estimate payroll at the beginning of a policy and then deal with an audit a year later. This can create major surprises in the form of large audit bills if you underestimate your payroll.

Pay-as-you-go workers comp solves that problem.

Watch the video below or keep reading to learn how…

Pay-As-You-Go Workers Comp Insurance

As cashflow becomes tighter, margins shrink, and focusing on your bottom line becomes more important, I highly recommend that you consider pay-as-you-go workers’ comp for your business.

It’s important to say that choosing a carrier that offers pay-as-you-go, does not impact your insurance coverage in any way.

This is not an endorsement to your policy, pay-as-you-go is a payment method.

What you as a business owner should consider is what adds value to your life, because pay-as-you-go has a couple of different options.

Payroll Company Integration

The first option is to connect your workers’ comp insurance policy to your payroll company.

What happens is, as you pay your payroll and your premiums are automatically taken out based on how much payroll you pay.

It removes your need to double input, it removes your need to estimate how much payroll you’re going to have.

You’re only going to pay premiums on what you pay through your payroll company.

Monthly Self-Reporting

The second option is monthly self-reporting, which allows you to go in each pay period and upload your payroll form and input how much payroll you paid your employees directly to the carrier.

This way, you do not have to go through your payroll company, you can go directly to your insurance carrier and the effect is the same.

You’re only going to pay premiums on the amount of payroll that you actually paid to your employees.

Why Choose Pay-As-You-Go Workers Comp?

For businesses that have a lot of fluctuation, both in the number of employees and the total amount of payroll throughout the year, pay-as-you-go workers’ comp is a no-brainer.

Additionally, even if you have a business that has a more steady state, just not having to think about paying your workers’ compensation premiums on a monthly basis removes one step, one headache from the process.

It also removes the need for an audit at the end of the year.

Even if that carrier does decide to audit your payroll, you know you’re going to be very close because you were only paying on what you inputted.

So oftentimes in those audits, you find only tiny little margins of difference, which means there’s no big surprise at the end of the year.

Downside to Pay-As-You-Go Workers Comp Plan

Some people don’t want the extra added thought, with Monthly Self-Reporting, of having to go in and input their payroll themselves.

And most payroll companies will charge a small fee for a pay-as-you-go program, which could be $15 to $25 dollars a month.

So, if you choose pay-as-you-go you’re going to have either a slight additional cost or the extra work of having to go in and input those premiums yourselves.

This is why some people continue to choose the standard option of estimating at the beginning of the year and paying or receiving a check back based on the difference in that estimation and audit at the end of the year.

READ NEXT: Five Ways To Reduce Your Workers’ Compensation Premiums

The Rub

If you have a seasonal business, high turnover rates, or if you just don’t want to have a scary workers comp audit bill surprise at the end of the year, I highly recommend a pay-as-you-go payment option.

You can take control of your workers’ comp cost.

Rogue Risk can help.

If your current insurance professional has never addressed issues such as total cost of risk or return to work programs with you before, then I’d encourage you to reach out to us today.

I look forward to introducing you to a new way of viewing your insurance program.

Thank you,

Ryan Hanley

Michael Fiacco
Michael Fiacco
Owner
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Ryan and his team work for you. I would highly recommend giving them a look at your business needs for honest feed back.
Matthew Davison
Matthew Davison
Chief Business Officer
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I’ve found Ryan and Rogue Risk to be professional and easy to work with. Most importantly, they are super responsive and offered up compelling coverage solutions that could save us money on our home and auto insurance, without sacrificing quality.
Lea Rutherford
Lea Rutherford
Financial Coordinator
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Rogue Risk has been awesome to work with! They know how to explain complex matter to you very simply and provides exceptional customer service.
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