Many believe the state fund is the only option. This is simply not true.

Our business is designed to educate and then provide affordable, simple, compliant workers comp solutions to a variety of “hard to place” businesses ranging from trucking to staffing to hospitality to everything in between across all fifty states. The traditional insurance markets have made business owners feel like their workers comp needs are difficult or bad when in reality it’s because they never wanted the business in the first place. Our solutions are provided by companies that actively seek out business just like yours because we’re experts at getting coverage for the businesses that the traditional market usually pushes away.

We specialize in unique policies that offer:

• Pay-as-you-go weekly premiums (instead of monthly based on annual estimates)

• Easy add/subtract process as your business grows or expands into different verticals

• Guaranteed compliance with all state and local employments

• Solutions available for employees working across multiple states

• Seamless integration with any preferred health and disability benefits

State funds, also known as state risk pools, have several disadvantages:

• Payroll amounts per class code estimated only once a year

• Cumbersome annual audits resulting in potentially large bills or credits back (ie you overpaid all year and were unable to use your operating funds efficiently)

• Generally high monthly premiums with no way to easily modify throughout the year

• Bad online platforms due to the states having no necessity to design better ones stemming from operating a monopolistic business with zero competition

The first step to a solution is being better informed.

Workers compensation (aka “work comp” or “comp”) is insurance that provides wage replacement and medical benefits for employees who are injured in the course of employment. In exchange employees relinquish the right to sue the employer for negligence. The trade-off between assured, limited coverage and lack of recourse outside the worker compensation system is known as “the compensation bargain.” Certain categories of companies have long been told, by their insurance agents mostly, that due to the nature of their work they can only qualify for coverage in their state’s assigned risk pool (aka “the state fund”) and our business exists because that is absolutely not true!

There are several viable alternatives to being insured through the state fund and there are several good reason to avoid state funds for workers comp insurance including:

• Expensive coverage options (measured as “rate per $100 of payroll”)

• Clumsy and repetitive issues with annual audits

• Poor online and phone support via client portals

• Rigid reporting requirements

We encounter several industries that are constantly being told that due to the high risk nature of their work including:

• Trucking and logistics

• Hospitality, hotels, and in-home services

• Staffing and contract employment businesses

Our business exists for the sole purposes of offering cost effective, reliable, and easy to administer workers compensation solutions for our current and prospective clients.

Though many states offer their own inclusive workers compensation state fund or risk pool, and each state has their own jurisdiction to set rates and coverages however they deem appropriate, it should be noted that at least thirty seven states or more utilize the same single source for workers comp data and rates, NCCI. Those states are: Alabama, Alaska, Arizona, Arkansas, Connecticut, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, Oklahoma, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, West Virginia, Wisconsin, and Wyoming. We have successfully placed business in all fifty states, though, so we would always encourage that you get in touch with us ASAP to discuss a personalized solution proposal.

While plans differ between jurisdictions, provisions can be made for weekly payments in place of wages (functioning in this case as a form of disability insurance), compensation for economic loss (past and future), reimbursement or payment of medical and like expenses (functioning as a form of health insurance), and benefits payable to the dependents of workers killed during employment (functioning as a form of life insurance). Damages for pain and suffering, and punitive damages for employer negligence, are generally not available in worker compensation plans. Negligence is generally not an issue in the case. All staffing companies that treat their workers as employees (versus independent contractors) must have a workers compensation coverage.

Workers compensation can be a significant cost to your business and should be reviewed at least every three months. From updating your safety programs to reviewing the status of work comp claims, workers’ comp needs to be administered and managed in your business on a regular basis.

Some examples of the types of solutions we provide are:

Professional Employer Organization (PEO) aka “Staff Leasing”

Professional employer organizations (PEOs) enable staffing companies to cost-effectively outsource human resource management including workers’ comp. This allows your staffing firm to concentrate on the operational and revenue-producing side of its operations. A PEO option:

• Provides a workers’ comp solution often with less expensive rates than some direct carriers and State Funds (depending on your comp loss experience.)

• Administers workers’ comp claims

• Manages employee benefits and payroll

• Manages payroll tax compliance

• Administers unemployment insurance claims

• Manages health benefits

As employee related requirements become more and more complex, a PEO solution assumes all these human-resource management responsibilities using a business model identical to ADP or Paychex. A PEO provides integrated services to effectively manage critical human resource responsibilities and employer risks for clients. A PEO delivers these services by establishing and maintaining an employer relationship with a company’s employees and by contractually assuming certain employer rights, responsibilities, and risks.

The company still controls the daily management of employees and controls all aspects of the employees’ work schedules.

Hundreds of companies use PEOs, and estimates show 2-3 million Americans are currently “co employed” through a PEO. Even though there are over 800 PEOs in 50 states, Nationwide Workers Comp Solutions has found only about five PEOs that specialize in servicing the staffing industry, and can effectively manage the large employee turnover that most staffing companies incur. These PEOs manage about $1 billion of payroll annually each.  The PEO industry currently generates between $136 billion and $156 billion in gross revenues. PEOs have an 88 percent client retention rate due to strong client satisfaction.

Employer of Record (EOR)

An Employer of Record (ie EOR) is very similar to a Professional Employer Organization (ie PEO) in that they both provide work comp and payroll services in a turnkey fashion to the staffing company. EOR’s enable staffing companies to cost-effectively combine payroll services and work comp coverage for all employees. In turn, a staffing firm can concentrate on the revenue-producing part of the business. Nationwide Workers Comp Solutions’ preferred EOR’s (like their PEO’s) service all 50 States.

EOR’s will work with start up staffing companies; whereas most PEO’s will only work with staffing companies with at least 1 year’s experience, and with at least 300K/yr in payroll.

In an EOR arrangement, the employees are 100% the legal responsibility of the EOR. Conversely, with a PEO, it is a “shared legal relationship” between the PEO and the client. This shared legal arrangement with a PEO is also referred to as a “co employment” arrangement. Like with a PEO, with an EOR, the relationship between with the staffing firm is generally invisible to the employee, and staffing companies clients. The company still controls the daily management of employees, all recruitment and screening activities, and controls all aspects of the employees’ work schedules and pay rates.

Benefits of an EOR (which are similar to a PEO) :

• Provides a workers’ comp solution often with less expensive rates than some direct carriers and State Funds (depending on your comp loss experience.)

• Administers workers’ comp claims.

• Manages employee benefits and payroll processes.

• Manages payroll tax compliance.

• Administers unemployment insurance claims.

• Workers compensation payments are “pay as you go.” Usually no upfront deposits are required.

• Charges between 1.5-3.0% of payroll for providing all administrative services.

Over 150,000 companies use EOR’s. Nationwide Workers Comp Solutions only works with a few EOR’s because Nationwide Workers Comp Solutions only uses EORs that are very experienced and have stable work comp carrier relationships. Nationwide Workers Comp Solutions’ preferred EOR’s all have established client bases and have been in business for at least 10 years.

Benefits of EOR and PEO’s

Most of Nationwide Workers Comp Solutions’ workers compensation programs are offered as “pay-as-you go” payment plans. With the PEO or EOR options, work comp fees are paid on a weekly or monthly basis and are directly related to the amount of payroll processed the previous week or month. This is one of the big benefits to using staff leasing or PEO programs. With direct carrier policies or captive programs, usually a 25% deposit is required upfront. Then the staffing company is required to make monthly installments to the insurance company based on a mutually agreed upon schedule. This is fine if your payroll increases during the course of your policy term, but if your payrolls fall, these prearranged monthly payments can become a cash flow burden.

Drawbacks to EORs and PEOs

Unlike a guaranteed program (like most State funds), with a work comp deductible element on a policy or PEO program you agree to pay a specific amount of money out-of-pocket when you file a covered claim.
For example, one of your employees has an accident, and the accident will cost the insurance company (or PEO) $5,000. If you’ve set your deductible at $500, then you’ll pay the first $500. The workers’ comp insurer pays the remaining $4,500. Alternatively, if your employee’s accident results in $500 worth of comp costs (or less), you’ll pay the entire workers’ comp claim.

Private Carrier Programs

This workers compensation option is usually only for staffing companies with a good workers’ comp loss history, have been in business for at least 3 years, and generates premiums of at least $15,000 a year. Some leading private insurance companies and markets that offer these policies to staffing companies include AIG, ULLICO, Guaranty, Travelers, Liberty Mutual, Berkshire Hathaway and Pinnacol. As a result of selecting better staffing companies, their rates are usually lower than a PEO or EOR, and less expensive than the state funds.

Private carriers will usually require:

• 30% down payment on the annual premium and may finance the remaining 70% over 6- 9 months.

• An annual on-site audit that will review class codes for accuracy—rate discrepancies and payroll levels.

• At least 3 years of good work comp loss history.

If you select a private carrier policy as your work comp solution, Nationwide Workers Comp Solutions can refer you to a payroll service that specializes in processing staffing clients payrolls and administering staffing health benefits.

Large Account Premium ( 250k+ ) Program Highlights:

• Greater flexibility with premium payments

• Customized Risk Management Program design and execution

• Greater attention from carrier

• Lower work comp rates

• Possible tax savings

• Most appropriate for light and heavy industrial codes.

• Applicable for PEO/EOR/ Private Carrier and State Fund comp programs