Workers Compensation Through a Payroll Company: Four Risks for Home Care Agencies

Bundling home health care workers compensation insurance into your payroll service is sold on convenience. Four things sit inside that bundle that are worth understanding before you move your policy.

1. Payroll companies charge more

Payroll companies sell workers compensation as part of a bundled service, and the bundle is the selling point. What the proposal does not show is the rate itself — how the workers compensation premium was built and what the same coverage would cost placed on its own. The true rates are not disclosed in their proposals, and the rate inside the bundle is higher than what you should be paying.

2. Claims services

Payroll companies are good at payroll. Claims negotiation is a separate discipline, and the claims services they collaborate with are not always strong at it. In home care a single injury can be severe, and when it is, you want the ability to be involved in the settlement of the case as far as you possibly can be. That is where we work differently: we give you a loss control policy and procedures program that improves your employee file, so during negotiations the attorney from the insurance company has documentation to use in settling the claim for a lower amount.

3. Loss runs claims explanations

Insurance companies know claims happen. What moves a renewal is what you can show alongside them. When your loss run report is presented with an explanation of each claim, and with evidence of the safety policy and procedures you have in place, the underwriter has a reason to justify their quote. That is how a workers compensation renewal increase gets kept limited, and it is what saves you money.

4. Experience mod factor

Your workers comp experience mod is calculated from your claims, and it follows your agency for three years. If claims are not paid attention to as they happen, the experience mod factor can become a significant increase in expense for your agency long after the claim itself has closed. Payroll companies do not typically explain this. We do.

Please, if you are being solicited by your payroll company to change your Workers Compensation Insurance to them, call us and we can go into even more detail.