Expense Constant? What’s an Expense Constant?

by Deborah Z Mark

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If you own a business, you may have heard of a workers’ comp expense constant.

Or maybe not.

But what is an expense constant, anyway?

All workers’ compensation policies contain an administrative fee known as the expense constant. It is an annual fee charged by the workers’ comp carrier to cover the basic costs of administering your workers’ comp policy.

Does it Apply to Everyone?

Yes.

The expense constant is charged on all workers’ compensation policies.

All businesses with employees are required by law to carry workers’ compensation coverage, regardless of the number of employees.

If there are no employees, and the business is only owner operated, the owner is not required to obtain a workers’ comp policy.

If My Premium is Low, do I Pay a Lower Expense Constant?

Nope.

The expense constant is a flat fee and not based on the amount of your premium.

Other Info

  • The expense constant is not subject to the premium discount (if any), or the experience rating modification (emod)
  • It is not included in the calculation of the standard premium
  • The full expense constant is charged for all polices, including short-term policies

When is it Due?

You will see the annual expense constant added to your managestaff payroll invoice whenever your policy renews. Most workers’ compensation policies renew in April.

Remember, it is the workers’ comp carrier’s charge that managestaff has paid in advance on behalf of your company, and is not a managestaff fee.

Have questions regarding workers’ compensation, risk management, or the expense constant?

Call managestaff.

Answering questions is included in our service to you.

At no additional expense.

managestaff.

It’s what we do.

Image: Stuart Miles/freedigitalphotos.net