Minimum premium are the lowest rates we can charge you for our workers’ compensation insurance and cover the cost to handle your policy. We’ll assign you a minimum premium policy if your payroll is small enough that your calculated premium is less than the minimum premium amount for your type of business. The minimum premium amount varies based on governing class code.

Minimum premium does not change based on the length of your policy term. If your policy is a minimum premium policy, you will pay the same amount whether your policy is for a few months or a full year, or even if you cancel before your policy expires. Our rates for minimum premium are approved by the state insurance regulator, and because we’re a not for profit entity, none of your premium goes to shareholders.

At the end of your policy term, you’ll report your payroll for the year and pay the final premium due. If the premium calculated is higher than the minimum premium, then you’ll owe that amount. You’ll always pay at least the minimum premium.

How Billing And Payroll Work For Minimum Premium Policies

In addition to the premium paid at the end of the policy, minimum premium policyholders pay a non-refundable amount at policy inception that’s equal to the amount of the minimum premium. This payment is used to pay the premium during the final year you have a policy with us.

On your first year, you will pay this amount, and if you choose to renew, you will also pay premium for the first year at the end of your policy term. Each year you renew after the first year, you will only pay the premium owed. When you cancel, your initial payment will be used to cover or help cover the final premium owed.

For example, here is what a minimum premium policyholder, whose minimum premium is $2,000, would pay if they canceled their policy after 3 years.

  • Year 1 – Policy incepted.
    • Pay a $2,000 minimum premium rate payment at beginning of the policy.
    • Pay $2,000 in final premium at the end of the policy.
  • Year 2 – Policy renews for a second year.
    • Pay $2,000 in final premium at the end of the policy.
  • Year 3 – Policy renewed for a third year, and then canceled.
    • Pays $0. The original $2,000 rate payment is used to pay the final premium for the final year.

If rates change or if your payroll increases, you may have to pay more.

Common Questions About Minimum Policy

Why do you charge a minimum premium?
Every policy has a cost to administer, regardless of the amount of payroll or length of policy term. The minimum premium ensures we can cover costs related to administering policies.

Why do I have to pay twice?
A minimum premium policyholder makes a first payment at the start of their first policy with us, equal to the amount of the minimum premium. If you cancel after one year, your first payment will be applied to your first year premium. If you renew after your first year, your first payment will be carried over to be applied to your final policy year, and you will pay premium for the first year.

Can I cancel my minimum premium policy to pay less than the minimum premium?
No. Regardless of the length of the policy term, you’ll still owe the minimum premium.