Carrying workers’ compensation is a smart business move, but for many companies, it is an operational requirement. Though required and financially necessary, the cost of lump-sum premium payments can be draining on your company’s budget. Fortunately, there is another valid coverage option that is easier on the bank account.
Pay As You Go
In general, workers’ compensation coverage addresses the financial costs of an employee getting injured or sick while on the job. The plan extends benefits that will address medical bills, rehabilitation, disability pay, and potential job retraining and integration back into the work environment.
For many companies, there is the freedom to choose an insurance plan from either a state or private provider. A majority of providers require up-front, lump-sum payments to extend coverage, but with a pay as you go work comp policy, payments are made each time payroll occurs. This is sometimes easier on the finances, as the amount owed is based on the payroll totals.
More Beneficial Plan
A majority of companies enjoy several benefits from a pay-as-you-go plan. The lump-sum strain on the account is gone, and there is more accuracy in the amount paid through each payroll calculation. The workers’ comp payments are generally automated, avoiding headache and stress to remember what amount is owed and when.
The alternative to a traditional workers’ compensation plan puts companies back in charge of their funds. It also gives them more of an incentive to manage their workplace safety ratings.