Workers’ Comp Flexible Payroll Reporting Option FAQ

Administered by SmartPay™, the Zurich Workers’ Compensation Flexible Payroll Reporting Option is Zurich’s pay-as-you-go payroll reporting solution for Workers’ Compensation (WC) policies. This option allows customers to pay their premium based on actual payrolls.

Benefits to customers include:

• Improved cash-flow management
• No down payment*
• Real-time premium calculations based on payroll reports
• Automatic premium withdrawal via Automated Clearing House (ACH)
• Lowered workers’ compensation audit exposure and more efficient audit process upon policy expiration/ cancellation
• Overall billing flexibility and convenience
• Payments spread out over a 12-month period

* 10% cash collateral required for non-automated reporters.

The option is available to qualified guaranteed cost WC customers who agree to pay premium via ACH withdrawal from a bank account. In addition, customers will need to be on Zurich’s Direct Bill installment payment plan for WC.

The Flexible Payroll Reporting Option allows customers to report their payrolls as they become available. WC premium for the period will be calculated based on actual payrolls and then automatically deducted from the bank account via ACH by SmartPay.

Customers can choose to self-report, report via approved payroll vendors, or use the optional SmartPay Payroll Reporting Service. The frequency of reporting can be monthly or by pay cycle (weekly, biweekly or semi-monthly)

1. Report via approved payroll vendor
   1. If a customer’s payroll vendor is in SmartPay’s network, SmartPay can work directly with the payroll vendor to set up automated reporting.
   2. If the payroll vendor is not on the list, a customer may contact SmartPay support (contact below) to see if it can be added.
   3. Cash collateral requirement is waived for this reporting method.
2. Self-report payroll
   1. Customers can select to self-report their payrolls on SmartPay’s platform by employee, by class code, or by uploading a payroll file, following SmartPay’s reporting template and instructions.
   2. For this self-reporting method, the customer is required to post cash collateral (10% of the total estimated annual premium) at the time the policy is bound. Note: Customers must sign the Cash Collateral Agreement, which is attached to the quote proposal.
3. SmartPay Payroll Reporting Service
   1. If a customer’s payroll vendor (e.g., ADP, Paychex) is not in SmartPay’s network and the customer doesn’t wish to self-report, the customer can use SmartPay’s optional reporting service.
   2. Please contact SmartPay support (contact below) to discuss eligibility and associated costs.
   3. For this reporting method, the customer is required to post cash collateral (10% of the total estimated annual premium) at the time the policy is bound.

Note: Customers must sign the Cash Collateral Agreement, which is attached to the quote proposal.

Zurich doesn’t charge a service fee for this option.

• If a customer plans to use a payroll vendor to report payroll on their behalf, please check to see if the vendor charges a fee for this service.
• If a customer chooses to use the SmartPay Payroll Reporting Services, SmartPay charges a fee, which will be billed separately by SmartPay. Please contact SmartPay Support for details.

No, by participating in this payment option, customers will not pay a down payment. A customer’s first and subsequent payments will be based on reported payrolls.

It depends. For customers who choose to self-report or report through SmartPay’s Payroll Reporting Services (both are considered non-automated reporters), Zurich requires that the customer post cash collateral in the amount of 10% of the total estimated annual premium upon policy bind. This will be used to offset any unpaid premiums after policy expiration/cancellation and post-audit. The customer and Zurich will enter into a Cash Collateral Agreement for the protection of both parties. Please refer to the Cash Collateral Agreement for more details. (A template of the Cash Collateral Agreement is attached to the quote proposal.) If applicable, SmartPay will debit customer’s bank account for the collateral amount, shortly after registration.

Zurich will still perform a final audit. However, with accurate and timely reporting of payrolls during the policy term, a typical customer would see lower premium adjustments at final audit. In addition, the audit process will be simpler and more efficient. Typical items for an audit are:

• Verifying employees are properly classified
• Reporting the status of 1099 workers
• Determining the insurance coverage of any subcontractors used during the policy period

Once enrolled in this option, on-time and accurate reporting of payrolls is critical.

• If a customer fails to report payroll by the reporting date, a series of reminders will be sent from SmartPay.
• If no report is made after the third reminder, Zurich will send the customer an invoice of the estimated premiums for the unreported period and current month (in the same manner as non-monthly reporting billing). If there is not a timely report/premium payment made by the customer, Zurich will send a policy cancellation notice to the customer.

Late or missed payroll reporting could lead to customer’s ineligibility to participate in the Zurich Workers’ Compensation Flexible Payroll Reporting Option in the next policy renewal.

Upon registration with SmartPay, customers will be asked to provide banking information to be used for recurring premium payment. For each reporting period, once a payroll is reported, the actual premium will be calculated and automatically withdrawn from customer’s bank account by SmartPay.

It is important to ensure there are sufficient funds in the bank account. Per the customer’s agreement with SmartPay, any bank draft return will result in SmartPay charging the customer a servicing fee of $50, which includes costs charged by SmartPay’s ACH vendor.

If there is no payroll to report for a period, ALL customers (regardless of reporting type) must log into SmartPay’s platform and submit a zero payroll for the period. Failure to do so will trigger late/missing payroll notifications. Action by the customer is required because payroll vendors typically don’t process zero payrolls.

There is no change to the endorsement process. Customers and their brokers will continue to receive declaration pages for endorsements from Zurich.

At renewal, Zurich Workers’ Compensation Flexible Payroll Reporting Option policies will automatically continue with this option, unless Zurich is notified by the customer or their broker otherwise before renewal processing. Non-participating customers who want to switch over to Zurich’s Flexible Payroll Reporting Option upon renewal should contact their broker preferably at least 60 days before the renewal date.

Once a policy is issued and set up with SmartPay as part of the Zurich Workers’ Compensation Flexible Payroll Reporting Option, only certain payroll reporting changes can be made during the policy term.

• Customer self-reporting to payroll vendor processing
• Payroll vendor processing to customer self-reporting
• Change payroll vendor mid-term

The customer, however, can always request policy-level changes and endorsements through their broker.

Note: Customers can’t cancel participation in the Zurich Workers’ Compensation Flexible Payroll Reporting Option during the policy period. In addition, bill changes from Agency or Special Bill to Direct Bill are not permitted during the policy period. The only way to unenroll or enroll in this option mid-term is a cancel/rewrite of the policy.

Zurich and SmartPay are committed to protecting customers’ personal information. All data is transferred via a secure transmission with industry standard SSL encryption to prevent unauthorized users from accessing the information.

Customers need to contact their broker prior to binding to express interest in this option.

Any questions related to payroll reporting, premium calculations or payroll data collection should be directed to SmartPay Customer Support:

• Phone: 877-905-0786
• Email: support@smartpayllc.com

A customer’s underwriting and policy processing questions should be directed to their broker.

Note: Once enrolled, SmartPay will send you a detailed user guide with additional step-by-step instructions.