Pay As You Go Work Comp

1manshow

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Any of you guys writing this ? Client pays compensation bill weekly or as they lay out the payroll, Pick your own commission level ? I'm thinking of writing a 20K acct. right now that I placed with the state fund at 0% commission, good modifier but class is trucking and oil & gas and no other carriers wanted it. They claim they have a carrier and I get at least 10% and a 5K bonus when I've placed 5 mil in payroll !!! That's right I said Payroll not EP ? Is this too good to be true ?

OpenDNS
 
I've heard about this too... it's a new thing being offered for workers comp... seems like it could become popular and a good way to get your foot in the door.
 
Not sure if it is "too good to be true" or not. But I signed up as soon as I saw the site. Better than that I talked to Jeffrey Kearns from the company about five minutes after that.

He walked me through a couple of things on the website and I am already brainstorming a new marketing campaign and niche market.

Give Jeff a call at 636-447-4939

Here is an excerpt from his welcome email:

What we do is real simple:

·We provide Pay-As-You-Go Workers’ Compensation and optional Payroll Services for companies nationwide.
·You the agent – will make 10% - 24% commissions and a $5,000 signing bonus for every 5 million in gross payroll you sign-up.
·We are currently helping a lot of companies that are in the various state fund/assigned risk programs for workers’ compensation insurance.

Thanks for the info 1manshow........ This kind of info gets my blood pumpin' and keeps me up at night.
 
I have an extensive background in the pay as you go work comp programs. It is not "to good to be true" and it is a rapidly growing concept that pays very well. Feel free to call me with questions.

Chad Filley
Staff Brokers, Inc.
877-416-0668
[email protected]
 
Hey there! Jeffrey Kearns here! It's not to good to be true, as Chad had mentioned. We have been providing Pay-As-You-Go Workers Comp for our clients and our 15,000 plus active agent's clients for over 5 years now. The commissions do run from 10% to 24%. To have your agency activated for submissions. Just give me a call at 636-447-4939 or send me an email to [email protected]. It's that easy! Hope to hear from you soon!:goofy:
 
What paper is it written on? I have worked with Applied Underwriters in the past and they are a pay as you go work comp carrier with the added payroll service they require. Commissions can go up to 10% but not 24%.
Not sure how you can pay 24% and still have competitive rates.
 
Here is a good article written by mynewmarkets.com

Pay-As-You-Go Workers’ Comp Hits Second Generation

“National payroll companies have made sure this workers’ compensation payment program [pay-as-you-go] is here to stay,” so says Andy Kohler of Unisource Program Administrators. “Why would a client pay workers’ comp premium any other way?”

Kohler, a marketing representative with Unisource, goes on to point out that “pay-as-you-go” programs are cost containment strategies workers’ compensation clients can use to better manage their cash flow related to workers’ compensation premiums. Plus, access to these plans has changed in the recent past, possibly to the agent’s benefit.

Historically, “pay-as-you-go”-type arrangements were almost exclusively found in and available only to clients of a professional employer organizations (PEO). When a client entered into one of these joint employer arrangements, the agent often lost the workers’ compensation policy to the group policy offered by the PEO. The two advantages generally offered by PEO’s were advantageous group experience modification factors and the cash flow advantages of pay-as-you-go. The only “cost” visible to the client/insured was the administrative cost to be part of the PEO. (Other “costs” were discovered only after jumping into the program causing many to jump back into the traditional market.)

Insurance carriers developed several payment programs to compete with the cash flow advantages apparently found in PEO’s; one was the monthly reporting form. Monthly reporting forms, as the name suggests, allowed the insured to file a monthly report of the actual payrolls by class code for the previous month and pay a premium based on the report. Sounds like a good alternative for the client.

The disadvantage of the monthly reporting form was the required “down payment.” Insureds were required to post some percentage of the estimated annual payroll, 20 to 25 percent was common, as a “non-working” cost of entry into the program. The term “non-working” payment is appropriate as this money did not apply to the premium, but was held by the insurance carrier in the event the insured did not make a payment or in the event of an unpaid additional premium audit (because the insured did not properly report payroll). This money was not kept in perpetuity, it was eventually returned to the insured based on individual company schedules; however, the insured did not have the use of the money as long as the carrier held it – somewhat negating any cash flow advantage of a reporting form.

A New Generation

Second generation pay-as-you-go programs have emerged over the last several years. Payroll companies, accounting firms and even insurance carriers (i.e. The Hartford has XactPay) have all jumped on the pay-as-you-go bandwagon.

The new generation of programs trashes the PEO requirement, but retains the necessity of a payroll company or third party payroll processing relationship of some kind. This requirement is somewhat reasonable since there is no “down payment.” Plus, a payroll processing relationship assures the insurance carrier that proper payroll is being reported and that the funds are available to pay the premium (after all, the employer must post the money to pay the employees, taxes and fees).

Additionally, this new generation of pay-as-you-go provides each insured an individual policy. Gone is the required participation in a group policy common in PEO arrangements. Each insured is individually underwritten and provided with its own policy just like in the traditional market. Further, loss experience and experience modification factors apply only to the individual named insured, not an entire group.

In all ways except for the requirement of having a payroll processing relationship and the removal of the need to estimate annual payroll/premium, this generation of pay-as-you-go product looks a lot like a traditional workers’ compensation program.

How Pay-As-You-Go Works

Each pay-as-you-go program administrator and/or payroll processing company may have its own procedures, but the general operation of a pay-as-you-go program will follow these guidelines:

<UL><LI>To qualify for a pay-as-you-go program, most administrators require a payroll processing relationship. If one already exists, many program administrators attempt to enter into a contract with the payroll firm to provide the necessary information and payments; should there be no payroll administration relationship, the program administrator may help the insured develop one.
<LI> The administrative cost of the pay-as-you-go program is negotiated between the insured and the payroll company.
<LI> The insured makes no down payment other than the expense constant required by each state.
<LI>Each pay period, the payroll processing company calculates the workers’ compensation premium by applying the net rates and class codes to actual payroll and drafts the premium from the insured.
<LI>The payroll company forwards the drafted premium on some pre-determined schedule to the program administrator or directly to the carrier (based on set up).
<LI>The carrier pays the commission to the program administrator who forwards part of it to the agent. Essentially the agent and the program administrator have a commission split arrangement (percentages may vary).</UL>

Agent’s Advantage

This new generation of pay-as-you-go product may allow many agents to offer their clients an alternative not previously beneficial to the producing agent. Now insureds may be able to enjoy some of the cash flow benefits historically limited to PEO clients while agents remain in the loop and earning income.
 
Hello Everyone! I always try to identify my competitors in the Pay as you Go market, therefore, while searching Pay as you Go work comp I came across this forum. I wanted to inform all agents looking to access the Pay as you Go market that my agency specializes in this market. We are 100% dedicated to the workers comp insurance market and specialize specifically in Pay as you Go. You can visit both our websites to research The Insurance Shop, LLC. Payrollcomp (.com) gives a good process flow of the Pay as you Go solution and by clicking on each state it identifies the types of businesses we have markets available for. Workerscompensationbrokers (.com) is designed specifically for current insurance agents who need a Pay as you Go market or a direct market for a tough business to place.

Please contact me with inquires into this solution.

Justin Bartmess
573-445-5535 x12
[email protected]
 
We are currently exploring this and signing up with Hartford XactPay. We have a payroll partner Paybridge who we will be exclusive with. Does anyone know of other carriers that will work with us the way The Hartford has? Does Travelers have a program like this?

I am also going to be exploring the National CMS Services/InsuranceShop options since I will need a place for business that doesn't want to switch payroll providers.

Thanks in advance for any recommendations for other carriers. I have searched all over the internet and only see the Hartford advertizing this.
 
We are an mono-line WC MGA that works with Zurich/Cybercomp on a Pay as you go basis. You could tap into those markets along with Hartford to increase your underwriting appetite. We are always looking to add additional payroll companies to our network.

Andy Kohler
[email protected]
 

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