Companies looking to save money on the costs of offering certain employee benefits have different options when it comes to healthcare and insurance. Some of the benefits offered to employees are required by federal and state law, such as healthcare and workers compensation coverage. Companies can pay a steep price to be in compliance, so any cost-cutting measures are often a welcome solution.
Reducing the Cost of Premiums
Companies will often purchase workers’ compensation insurance to meet the liabilities associated with employees who suffer from injuries or illnesses while on the job. There are many factors that determine the cost of these policies, such as the size of the company, prior claims of injuries, and the general risks of the industry. One way to meet required obligations and still reduce the burden of expense on a company is through pay as you go workers comp insurance.
This is a highly preferred alternative for small businesses with tend to have low injury risks. Rather than pay a premium based on the projected payroll for the coming year, companies are able to pay throughout the year (according to their weekly or monthly payroll) rather than wondering if they will be receiving a refund or owing extra at the end of the business year.
This pay as you go plan is a more consistent and reliable way to address workers’ comp expenses. A company can manage its budget better and avoid large, lump-sum back payments at the end of the year to the insurer.