Premium Calculation:  Frequently Asked Questions...

The classification (other than a standard exception) that best describes the workers compensation exposure of an employer's business. This is also normally the classification that contains the largest amount of payroll.

Certain employee groups are rated separately instead of being included under the main class code. The NCCI Standard Exceptions Codes, for workers' compensation, are:

• 8810 Clerical Office

• 8742 Outside Sales

• 7380 Drivers

If, however, the scopes class code description states that one of these employee group are included under the main class code, then the Standard Exception guideline would not apply.

The Expense Constant is a flat charge added to every workers' compensation policy and represents the common administrative expenses associated with the issuing and administering of a policy.

Workers' Compensation is based upon gross wages paid to employees.

Here is what is Included:

• Wages or salaries

• Commissions

• Bonuses and stock bonus plans

• Overtime pay (see excluded for more information)

• Pay for time not worked such as holidays, vacation, sick pay

• Payment by an employer for items that would normally be paid by the employee

• Payment for piecework, profit sharing, or incentives

• Rental value of an apartment or house, received by the employee as part of their pay

• Meals received by the employee as part of their pay

• Store certificates, merchandise, credits or other substitutes for money received as part of their pay

• Payments for salary reduction from employee’s gross pay, such as savings plan, cafeteria plan, retirement

• Davis-Bacon wages

• Annuity plans

• Expense reimbursements to employees where employer cannot show it was a valid business expense

• Payment for filming commercials or other advertisements

Now, for what is excluded:

• Tips and other gratuities

• Payments by the employer to group health insurance, group pension plans, Davis-Bacon Act

• Payment to the employee for invention or discovery

• Premium overtime pay (1/3 of time and a half overtime, or 1/2 for double time pay)

• Severance Pay, except for time worked or accrued vacation

• Payment for active military duty

• Employee discounts on goods purchased from their employer

• Expense reimbursements that are shown to be valid business expenses

• Money for meals during late work

• Work uniform allowance

• Sick pay paid by a third party, such as disability insurance carrier

• Employer-provided perks, such as use of automobile, club membership, event tickets, airfare

• Employer contributions to salary reduction such as savings plan, cafeteria plan, retirement

According to the Florida Statute 440.036: (11) “Casual labor” means labor that is occasional, incidental, or irregular, not exceeding 200 person-hours in total duration. As used in this subsection, the term “duration” means the period of time from the commencement to the completion of the particular job or project. Services performed by an employee for his or her employer during a period of 1 calendar month or any 2 consecutive calendar months, however, are deemed to be casual labor only if the service is performed on 10 or fewer calendar days, regardless of whether those days are consecutive. If any of the services performed by an individual on a particular labor project are not casual labor, each of the services performed by the individual on that job or project may not be deemed casual labor. Services must constitute casual labor and may not be performed in the course of the employer’s trade or business for those services to be exempt under this section.

For most insureds within the State of Florida, coverage is available within the voluntary market and is charged at state set rates for workers' compensation. Beyond that, plans may be available, based on premium size and losses that will allow credits and dividends. For some insureds, however, obtaining coverage within the voluntary market may be difficult. Perhaps the insured has unfavorable loss history, small payroll or simply be a higher risk operation. For a limited amount of insureds (currently 10% of the carriers' writings), the state allows carriers to issue a "Consent to Rate" policy. A “Consent to Rate” policy is one in which the insured agrees to allow the insurance company to charge a higher rate or set minimum to be able to obtain insurance.

The Expense Constant is a State of Florida flat surcharge. It covers the basic costs to administer the policy. It includes the cost to issue the policy, report policy information to the state and perform other policy administration.

The charge is a flat policy fee that is included on all policies, regardless of premium size.

It is a mandatory item that cannot be removed.

The short answer is "No". Not all policies cost the same. Let me offers some explanation...

• Yes, the rates are set by the State of Florida.

• Yes, all carriers have the ability to offer the same set of credits and surcharges.

If you get a policy that is simply based on the payroll calculation, plus the credits and surcharges available, then that is what is referred to as a "Guaranteed Cost" policy.

But, not all carriers offer loss sensitive plans and that can save you a lot of money. There are 2 basic types of loss sensitive plans for small and medium-to-large sized accounts:

• Dividend Plans - (Savings from 3% to near 50%)

• Retrospective Rating Plans - (Savings to over 50%)

See the additional FAQ questions about to get a better understanding of the types of loss sensitive plans and their structure.

• What is a Dividend Plan?

• What is a Retrospective Rating Plan?

Don't just settle for the guaranteed cost. Reach higher and improve your bottom line!

Give us a call and we will be happy to explore a loss sensitive plan for your firm. Let's get you saving money today!

Each insurance company has their own set of payment plans. Dependent on your premiu size, you choose the available plan that works best for your company. Plans available typically include:

• Installment billing - The insurance company sends you an invoice for each payment period. Normally the choices are:

  • Monthly

  • Quarterly

  • Semi-Annual

  • Annual

• Monthly Self-Audit or Pay-as-you-go-billing - For those employers whose payroll fluctuations, you can pay based on your actual payroll each month. You may either choose to do the reporting yourself or have a payroll service report your payroll.

Once you choose the payment plan that works best, you can choose the way you wish to pay. You may be able to pay by:

1. Check

2. ACH (a withdrawal directly from your bank account)

3. Credit Card (this is not offered by all companies and will typically include a processing charge)

WCA has a wide variety of payment plans available with the carriers we represent. Give us a call and we'll be happy to talk to you about your options.

The short answer is "No". You do not have the option to remove it from a Florida workers' compensation insurance policy.

The Terrorism Risk Insurance Act (TRIA) surcharge is a federal program that is on all insurance policies in the country since 2002. Some states allow you to opt out, but Florida is not one of them.

The charge is small and is based on the payroll on the policy. The surcharge was created to help reimburse insurance companies if we have any future terrorist events. 9/11/2021 bankrupted a number of insurance companies because of the volume of claims they received from one event. The funds from the surcharge will be available to help support insurance companies paying claims from a terrorist event in the future.