Reconciling your true payroll with your estimated annual premium
The Ohio Bureau of Workers’ Compensation bases the premiums that an employer pays each year on the company’s estimated payroll. The payroll true-up report is the process that requires employers to report their actual payroll for the prior policy year and reconcile any over- or underpayments in premiums paid. Payroll true-up reporting is critical to allowing the BWC to more accurately calculate the premiums of company’s year after year. Additionally, the process is also necessary to maintain your policy and continue participation in your current rating plan or discount programs. Every employer must complete the report – even if you had zero payroll for the previous policy year or if your payroll matched the estimate.
Ohio employers are required to pay workers’ compensation premiums that are based on the company’s total amount of annual payroll multiplied by a specified rate. The Ohio BWC provides employers with an estimated annual premium (EAP) at the beginning of each policy year based on estimated payroll. If you are a new employer, the BWC bases the EAP on the 12-month payroll estimate provided by your company on your initial application for workers’ compensation insurance. If you are an established employer, your EAP is based on your most recently reported payroll.
Since the BWC bases your premiums on your estimated annual payroll, each year you are required to submit your payroll true-up report to ensure that the premium was accurate. To achieve this, every employer is required to complete a true-up report that reflects your company’s actual payroll for the prior policy year. You must complete the report online using the Payroll True-Up report portal.
Filing your report
The deadline for completion of the true-up report and the reconciliation of any outstanding premiums is August 15 for all private, state-fund employers. If your true-up payroll is greater than your estimated payroll, you will owe additional premium. If your true-up payroll is less than your estimated payroll, you will receive a premium credit.
If you owe additional premium, payments may be made online at the time of report completion or submitted via mail with the payment coupon from the confirmation page. If you choose to mail in your payment, you must still complete and submit the report online. To remain compliant, it is vital that you complete your report in a timely manner to ensure that any outstanding premium is credited to your account by the August 15 deadline. As a general rule, the BWC recommends that you allow two business days for payments to post to your account.
True-up reporting and your TPA
While the Ohio BWC may not require your company to use a third-party administrator (TPA), your TPA partner can help you easily and quickly complete your payroll true-up report each year, while identifying cost containment strategies for your company. While the Bureau of Workers’ Compensation looks out for the interests of your injured employees, your TPA will advocate for your company – helping you save money and assisting with claim cost-reduction.
Learn more about Workers’ Compensation today by contacting a Sheakley WC professional. Stay up-to-date on all things Sheakley by subscribing to our blog and following us on social media. Join in the discussion by commenting below.