BENEFITS

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Advantages of ‘Pay-as-You-Go’ Workers’ Comp

QUICK SUMMARY

With just a little digging online, you’ll likely find dozens of providers offering workers compensation insurance on a pay-as-you-go basis. In doing your homework, be sure to keep this in mind:

Pay-as-you-go workers comp is simply an alternative way of making your premium payments. It’s not different insurance, and it doesn’t replace your workers comp insurance or your responsibility to pay premiums, collect/issue certificates of insurance from subcontractors, etc. Your coverage must still be provided through a state-approved workers comp insurance carrier or approved self-insured source.

That said, there are compelling reasons for small businesses to consider the pay-as-you-go method of paying workers comp premiums. You can learn about a few of the major ones in this module.

Workers’ Comp with No Down Payment: Healthier Cash Flow

With pay-as-you-go, you don’t have to make a large, cash-flow-killing down payment up front. You can purchase a policy with little money down, and then pay your premium in smaller amounts spread over the course of the year.

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Workers’ Comp Auto Premium Payments

Working with your payroll service provider, you can bundle your workers comp premium with your payroll and pay a single bill—with payroll, taxes and workers comp included —each pay period.

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Pay Your Workers’ Comp Premiums Based on Your Schedule

With pay-as-you-go, your premium payments are based on your actual payroll, not projected annual payroll. That can help protect you from audit exposure, because your premium is based on real-time payroll wages, not an estimate.

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