A Better Way to Handle Workers’ Compensation Insurance

More than 100 insurance carriers are licensed to offer workers’ compensation insurance in Hawaiʻi. Insurance carriers have managed workers’ compensation the same way for decades. Traditional programs rely on payroll estimates, annual audits, and hefty upfront deposits, creating unnecessary stress and financial uncertainty.

There’s a smarter way. No more guessing games—just clarity, simplicity, and control.

By integrating workers’ compensation with payroll, employers:

• Make actual, not estimated, premium payments
• Eliminate the need for annual audits
• Eliminate annual deposit premiums
• Minimize surprise payments
• Realize significant time savings
• Improve cash flows

“Clients are always surprised by how much simpler the workers’ compensation process can be,” says HR Specialist and long-time insurance industry expert John Foster. “Doing away with ever-changing estimates, forecasts, and annual audits is a huge burden lifted off the shoulders of business owners.”

Let’s look at the advantages of removing cumbersome processes of traditional workers’ compensation programs.

Financial uncertainty with traditional workers’ compensation programs

Traditional programs are based on employers having to estimate, guess and forecast future payroll for each job type in the organization. When quotes are based on estimated payroll, employers spend hours on year-end payroll audits leading to unexpected costs.

Consequences for a low estimate mean the employer will owe the carrier additional money that may not be in the budget. If the deposit exceeds the final premium, the business must wait for a refund—hurting cash flow.

Financial certainty with workers’ comp insurance and payroll integration

Simplify workers’ compensation insurance by combining it with payroll, the premium is accurately calculated each payroll period. Any changes to employee counts or wages paid are immediately accounted for and accrued for each pay period.

“The guessing game is over!” explains Foster to skeptical HR managers. “Combining workers’ compensation with payroll means never needing to complete another work comp audit ever again.”

Improved cash flow with payroll and workers’ compensation integration

Traditional policies require a 20–25% upfront deposit at the start of the year. In contrast, when insurance premiums are accrued and paid for each pay period, the cash flow of the business is increased. The benefit? Simplified accounting and eliminating large deposits with the carrier at the start of the year.

A better way of managing business

By merging payroll and workers’ compensation insurance together, smart companies eliminate the confusing mix of annual pricing variables such as safety credits, premium discounts and deductibles used by carriers. ALTRES simplifies workers’ compensation with a clear, agreed-upon rate making coverage easy and affordable.

From the beginning in 1969, the mission at ALTRES has always been to make business simple for our clients. simplicityHR by ALTRES takes all the guesswork and volatility out of workers’ compensation and brings clarity, transparency and stability to this mandatory insurance coverage.

This article is for informational purposes only and does not constitute legal advice. Readers should first consult their attorney, accountant or adviser before acting upon any information in this article.