Workers' Compensation | Jason Palmer, CPA, CITP

When Quickbooks Payroll by Intuit partnered up with The Hartford to offer “Pay- as-you-Go” Workers Compensation Policies, I decided to investigate.

If you use Quickbooks Full Service Payroll, which is a comprehensive service that includes direct deposit of employee paychecks, automatic preparation of payroll tax forms and payment of taxes, with The Hartford, you can pay your Workers Compensation with each pay period.

If you use Basic (Paycheck Calculations Only) or Enhanced Payroll (Paychecks and Tax Form Preparation) you can still use The Hartford, but you have to make the periodic Workers Compensation payment directly through The Hartford web site. It is not an automatic deduction. This is still a better option than having to make one big Workers Compensation payment each year on the anniversary date of your policy. (As of this writing, Disability Policies at The Hartford are not available on the “Pay-as-you-Go” billing platform and must be paid in full annually.)

I contacted The Hartford and was able to obtain quotes almost immediately. For Workers Compensation, the annual premium was a significant savings. For Disability, the annual premium was higher but the combination of the two policies was still a savings. When I asked my commercial insurance broker his opinion of The Hartford, he had only good things to say. Specifically he mentioned that their customer service is very responsive and that they pay their claims in a timely manner.

True to form, I had a number of questions for The Hartford about the quotes presented and they were extremely responsive. This included their ability to put the new policies in place almost immediately should I decide to proceed. However, if you read my last post, “Leaving NYSIF – New York State Insurance Fund – Not So Easy”, it was all for naught as I was unable to exit my NYSIF policies. [I will be looking at The Hartford again and perhaps some other Carriers as my NYSIF renewal date approaches.]

Important Safety Tip: Absolutely check with your current Workers Compensation and Disability Insurance Carriers to determine your ability to cancel your policy and leave prior to term BEFORE you obtain quotes or complete any applications. It will just save you a great deal of time and aggravation. Penalties for early departure can be severe.

NOTE: The degree to which you can actually “Pay-as-you-Go” with The Hartford will vary with the specific Quickbooks Payroll Service you have selected and the amount of your policy premiums. In the case of some Policies, the Premium may be so small that it makes more sense, or the only option may be, to pay annually.

More Information on The Hartford at:
http://www.thehartford.com/worker-compensation

More Information on Intuit Payroll at:
http://payroll.intuit.com

Disclaimer: The information presented above is my personal experience and current as of the date of this article posting as it applied to my specific situation. I am a licensed Certified Financial Planner and Certified Public Accountant (licensed in the State of New York.) I am not licensed to sell or represent any insurance product in any State. Insurance Carrier rules and regulations vary by State and change frequently. You must check with your own Agent, Broker, or Insurance Carrier directly to verify the information as it may apply to your specific situation.

My Workers Compensation and Disability Policies are with NYSIF – The New York State Insurance Fund. Early on, I was single shareholder corporation with no employees and therefore was able to exclude myself from the Workers Compensation Policy. In the Insurance Industry, this is known as a “Ghost Policy.” New York State absolutely requires that any business that has a payroll, with or without eligible employees, must have both a Workers Compensation and Disability Policy in place.

At the time, on the advice of my commercial insurance broker, he directed me to NYSIF because they would have the least expensive policy premium minimums. Since I had no employees to cover, things like customer service and claims were non issues. I just needed the policies in place to comply with the regulations. For the most part, if you are in this situation, with no eligible employees and exclude yourself as the single (or no more than two) person shareholder company, NYSIF is a good option for New York State Workers Compensation and Disability coverage.

I was investigating switching Carriers just after my policy had renewed, July 1^st.

What I learned was that terminating coverage at NYSIF at any other time than approximately 45 days prior to the policy renewal date comes with extreme prejudice. NYSIF enforces a 30 Day written cancellation notice as purportedly mandated by New York State Law.

Furthermore, NYSIF enforces something called a “Short Rate” penalty for policies canceled prior to the end date. In the case of my Disability Policy the penalty was 100% of the paid premium because I was at the policy premium minimum. For my Workers Compensation policy the NYSIF underwriter would not provide the penalty amount. He simply stated the penalty would be “severe.”

Be advised that if you have a NYSIF – New York State Insurance Fund Workers Compensation and Disability Policy and want to change Insurance Carriers, you must plan to do so approximately 45 days prior to the end date of your policy. This will allow you time to get quotes from alternate Carriers and provide the proper 30 Day written notice to NYSIF that you intend to cancel your policy and move your coverage.

Should you decide to terminate your policy with NYSIF, you must send the notice in writing on Company Letterhead at least 30 days prior to the renewal date of the policy. The letter must include the following information: Policy Name and Current Address; Policy Number; Reason for Cancellation; Effective Date of Cancellation; Policyholder’s signature; Current Telephone Number.

In the case of the Disability Policy you can send a signed scanned copy of this document via email or fax. However, the Workers Compensation cancellation document will only be accepted via U.S. Mail and NYSIF will look to either the date requested on your letter or “30 Days from the Postmark” whichever is later as the effective date of the cancellation regardless of your intended date. (Contact NYSIF Customer Service directly to obtain the current contact information for where to send the cancellation letter(s).)