There are 3 primary benefits:
- Predictable cash flow - Traditional billing methods ask you to fund between 25-100% of your estimated annual premium up front. Rather than paying for your insurance up to a year in advance and tying up vital cash, with pay as you go you pay your premium as you go, one payroll period at a time.
- Avoid surprises at audit - Traditional billing is based on an estimated premium that is in place throughout the term of the policy. As your business grows, no adjustments are made to your premium. When insurance companies audit your policy at the end of the policy term, surprising amounts of additional premium can be due. Pay as you go, on the other hand, accurately accounts for payroll variability by calculating your premium every pay cycle and adjusts your bill accordingly. This more accurate approach minimizes the chance of surprises at the end of the policy term and while pay as you go doesn’t eliminate audits, it can reduce the chance of costly surprises that can come with them.
- Save time and money - In addition to spending far less time on your year-end audit, with pay as you go there are no checks to write or payments to remember, allowing you to spend far more time focusing on your business instead of workers’ compensation paperwork. And unlike traditional billing options, with pay as you go there are no installment-billing fees from insurance companies.