If our practice uses a payroll company or a Professional Employer Organization (PEO) can we carve out the workers’ compensation coverage to join a dividend program that will be more favorable?

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Many medical practice administrators are unaware that most payroll companies and PEOs will allow them to carve out the workers’ compensation coverage in order to join a dividend program. The workers’ compensation coverage is not a priority for payroll companies and PEOs. They are usually willing to work with you in order to maintain the payroll and human resource portions of your practice.

Moving into an independent workers’ compensation dividend program can be easily accomplished by using the payroll company or PEO to provide the payroll information directly to the workers’ compensation carrier. If you have a small premium (less than $10,000), you can join directly with the assistance of your independent agent with very little effort.

The benefits of joining a dividend program are the potential yearly reward of up to 25% for small practices and up to 45% for large practices. In addition, the physician officers can choose to be exempt from the policy. Many PEOs include the officers as they become employees of the PEO. This is a large expense that can be avoided. As always, I recommend that you seek qualified, competent expert advice from an independent agent specializing in workers’ compensation insurance.