Why does BHHC use pay-as-you-go billing for workers comp?

Why Does BHHC Use Pay-As-You-Go Billing for Workers Comp?

BHHC, which stands for Berkshire Hathaway Homestate Companies, uses pay-as-you-go billing for workers compensation because it ties your premium to your actual payroll as it is earned, rather than requiring a large upfront deposit based on an annual estimate. Workers compensation cost is calculated from payroll, so a billing method that tracks real payroll eliminates most of the guesswork from traditional annual billing. The result is steadier cash flow and fewer surprises at audit time.

How Does Traditional Workers Comp Billing Work?

With traditional workers compensation billing, you estimate your total payroll for the year at policy inception, pay a large deposit based on that estimate, and then settle the difference at an audit after the policy ends. If you underestimated payroll, you owe a significant additional bill at audit. If you overestimated, you tied up cash that could have stayed in the business. Businesses with variable or seasonal staffing find this cycle especially difficult to manage.

How Does Pay-As-You-Go Billing Work With BHHC?

Pay-as-you-go works differently in four key ways:

• Premium is calculated from real payroll each pay period, often through your payroll system, so you pay based on wages actually spent.
• Little or no large deposit is required at the start of the policy, keeping cash available in the business.
• Smaller audit adjustments, since payments already track actual payroll, the year-end audit rarely produces a large unexpected bill.
• Less manual reporting, because the billing often connects directly to your payroll provider and updates automatically.

Our FAQ on Georgia workers comp employee count rules explains which workers are included in payroll calculations, which is relevant when setting up pay-as-you-go billing correctly.

Which Georgia Businesses Benefit Most From Pay-As-You-Go?

Pay-as-you-go is especially useful for businesses with fluctuating payroll, such as seasonal or growing companies. For example, a Georgia landscaping firm that hires extra crew in summer and trims back in winter pays more in busy months and less in slow ones, instead of estimating the full year in advance and risking a large audit bill at year end.

For example, a retail shop in Macon that adds temporary staff for the holiday season sees the same benefit: workers comp premium rises in November and December when those extra workers are on payroll, then drops back down in January, matching the cost of coverage to the actual period of exposure.

Does Pay-As-You-Go Change What the Workers Comp Policy Covers?

Pay-as-you-go does not change what the policy covers. It still pays for medical care, lost wages, and employer liability the same way a traditional policy does. The difference is purely in how and when you pay the premium, which removes a common cash-flow problem without giving anything up in coverage. Our FAQ on what workers compensation insurance covers explains the coverage side in full. If you are not yet sure whether your Georgia business is legally required to carry workers comp, our FAQ on what businesses qualify for a BOP also covers how workers comp fits alongside other business coverages.

BHHC is one of several workers compensation carriers available through Olive Cover. As an independent agent, we can compare pay-as-you-go options across carriers to fit how your business actually runs. To see whether this billing approach is the right fit, request a free coverage review.