Workers comp program offers more options, flexibility

eNet Business Services has started offering a worker’s compensation program designed to give businesses easier payment options.

OnTheMark, a zero-down, pay-as-you-go worker’s compensation program for businesses, brings two former competitors together to change the way work comp programs work, eNet President Clay Bethune said.

Until OnTheMark came along, the payroll companies were functioning as competitors to insurance agents offering traditional work comp programs, Bethune said.

Worker’s compensation is a function of payroll, with premiums based on what a business pays in payroll. Before pay-as-you-go programs rolled out about eight years ago, insurance agents would have companies give them the best estimates of the year’s payroll.

Premiums were based on this estimate, and the company paid about a 25 percent down payment, along with periodical payments. An audit at the end of the year determined what-if anything-was still owed to the insurance carrier.

Pay-as-you-go programs make the process seamless, with no down payments and automatic premium calculations each payroll period, thus saving a company the down payment and any unexpected end-of-year expenses, Bethune said.

But until OnTheMark came along, pay-as-you-go programs were the exclusive domain of payroll companies, with insurance agents stuck selling traditional work comp programs.

Bethune said he came up with the idea for OnTheMark after finding his payroll company, located at 302 Campusview Drive suite 206, competing with insurance agents.

“I didn’t want the insurance, but I wanted the payroll, “so I decided to partner up with insurance agencies,” he said.

He realized that coming together was a win-win situation for both his company and the insurance agency, letting Bethune pick up a new payroll client while allowing the agency to offer its client a unique service.

Bethune partnered with insurance brokerage Arthur J. Gallagher & Co. to administer the program and with carrier Swiss Re to write the paper.

He approached the Arthur J. Gallagher program in the summer of 2007 to pitch the idea, but it took about 18 months to get the program off the ground.

Arthur J. Gallagher was interested and willing to roll the program out with eNet, but initially doubted Bethune could find a willing carrier. After calling about 60 different work-comp carriers, Bethune settled on Swiss Re, which already had a pay-as-you go-program for payroll companies, as the best fit for the program.

Now other payroll companies have been calling Arthur J. Gallagher, Bethune said, but eNet has exclusive rights to the deal.

OnTheMark is aimed primarily industries like restaurants, contractors or other seasonal workers, whose payrolls fluctuates greatly or who pay a higher work comp rate.

Reaction has been “fantastic” since OnTheMark rolled out in July, Bethune said. “Gets better each week.”

Bethune estimated his business is about 40 percent larger now than it was a year ago, and expects OnTheMark to eventually make up about 80 percent of his business.

Insurance agents have largely embraced the program once its explained to them, Bethune said. The program is a wholesale program, he said, and thus doesn’t affect commissions.

Steve Tade, an account executive with Winter Dent and Co., said OnTheMark has worked well for a contractor he put into the program.

“They’ve been extremely happy,” Tade said.

Tade thought OnTheMark worked well for newer companies that have to watch their cash flow and for small to mid-size companies that don’t have anyone in the office to work with payroll.

By eliminating the chance of a large premium payment due to audit at the end of a year and adjusting payments through the slower times, the program should help a company’s cash flow “quite a bit,” Tade said.

The recent economic downturn could mean a boost for the program, Bethune said.

“It’s making our program even more attractive because it’s saving people money,” he said.

The program is already available in 23 states, including Missouri and its surrounding states, Bethune said, adding he plans to have the program running in all 50 states in the next few years.