By now, business owners should have received the Bureau of Workers’ Compensation (BWC) Notice of Estimated Annual Premium Renewal for their July 1, 2016 policy term in the mail. This year in particular, we urge you to pay special attention to this mailing, because it includes your new installment schedule.
This schedule shows the premium amounts due and payment dates for the upcoming year (July 1, 2016 to June 30, 2017). This is the second year – and the first full year – of using the method of paying workers’ compensation (WC) premiums on a prospective basis.
In previous years, businesses would report their wages after six months, and then pay their respective WC premiums within two months after that six-month period. Now, the BWC has instituted a prospective billing system whereby a business must estimate its payroll for the entire year. Once that year is up, that business must file a return that will cite its actual payroll dollars—and then it must true-up those estimates that it has been paying.
Note that estimates in the BWC’s installment schedule are based on the BWC’s best calculation, given the information it has on your company and its payroll. Your business’ situation may change, so that schedule may not reflect your business’ actual payroll. If your company’s payroll has increased or declined, you have the ability to go back and challenge the estimate amounts if you feel the calculation was inaccurate.
True-Up of June 30, 2016
July 1, 2015 to June 30, 2016 is the first year that the BWC used prospective billing for WC. So, from those dates, the BWC worked off of estimated payroll figures in determining monthly WC premiums that your business should be paying. We’re now getting close to June 30, and businesses will now be filing their first payroll return under the new system. Therefore, for the first time, they will have to report their annual filing that will reconcile and true-up what they paid in, versus what their actual costs will be. In other words, a business must list its exact payroll times its rate to determine the exact amount of its WC payment.
You can manage your true-up through the phone or online. However, by using the online true-up and payment option, you may be able to save money. Specifically, eligible employers will qualify for a one-percent premium rebate, up to a $2,000 maximum rebate. To manage your true-up online, visit www.bwc.ohio.gov, and sign up for a BWC e-account, if you don’t already have one.
Additionally, the BWC offers many resources to assist you with the payroll true-up at www.bwc.ohio.gov. From the home page, click on Employer then select Prospective billing. The BWC also has a call center to assist you at 1-800-644-6292.
If you’d like to discuss issues relating to Workers’ Compensation in more detail, please contact Roger Gingerich, CPA, ABV, CVA, CCA at 440-449-6800 or email@example.com.