For businesses that have employees, Workers Compensation insurance may be one of the most important policies you purchase. In New Jersey, it is legally required for you to offer this type of insurance coverage for your employees, and it is also a good idea to protect your business with this coverage. Let’s take a look at Paying as you go option for your workers compensation plan.
What is Paying-As-You-Go?
According to Capstone Insurance, the definition of Pay-As-You-Go Workers Compensation is, “A plan that allows businesses to pay for their Worker’s Compensation policies throughout the year instead of in a lump-sum payment. Many times these programs go through payroll companies and the payments are calculated along with payroll.”
How Does it Work?
With past payment plans, businesses pay an estimated premium based on payroll. With the Pay-As-You-Go option, it eliminates large upfront costs and outdated payment methods. This option relies on real time payroll to calculate premiums instead of estimating.
What are the Benefits?
Eliminate Large Payments
With older plans, an estimated sum of your payroll is calculated. This results in the possibility of paying too much or too little at the beginning and end of the year. If you pay the large sum at the start and overpay, it may take time to get your money back to you. If you pay too little at the end, you will be required to pay the rest in full. As a small business, money saved is valuable.
Make Accurate Payments
As mentioned previously, there is a possibility that your business will drastically overpay at the beginning and won’t get that money back until the end; or you will drastically underpay and have to pay the difference at the end of the year. With the Pay-As-You-Go option, it is calculated by payroll, resulting in hardly any over or under pay.
Save Time & Reduce Risk
When payroll is integrated with workers’ comp, the monthly premiums are automatically deducted, saving time, easing administrative burdens and reducing the chance of missed or late payments and policy cancellations.
Our professional staff here at Danskin would be more than happy to sit down with you and discuss how the Pay-As-You-Go option could benefit your business. If you’d like to learn more about the Pay-As-You-Go option for Workers Compensation, visit our website or call today to speak with one of our professionals.