What happens if I can't pay my premium?

We'll dive into the premium payment journey for NSW businesses, what they can expect if their premium payment becomes overdue and what support is available to help them keep their premiums up to date.

What factors impact an employer's ability to pay their premiums?

Employers may have difficulty paying their workers insurance premiums for a number of reasons.

What we do know is that, where an employer is unable to make payment on time, it is quite often because they need to change the coverage of their policy due to changes in their business circumstances. It is therefore important for employers to get in touch with icare and update their policy needs, as and when these changes occur, so they are paying the right amount for their cover.

Apart from fluctuations and disruptions to their operations due to business or financial reasons, external events such as bushfires, floods, and more recently COVID-19, have also impacted employers' ability to keep up with their premium payments.

How has COVID-19 impacted employers' ability to pay their premiums?

As mentioned in our previous article, COVID-19 has had an unprecedented impact on the economic environment, causing some NSW businesses to shut down their operations temporarily or reduce their business activity and their workforce.

Many businesses have experienced financial hardship as a result of COVID-19 impacts. This financial hardship has meant they have not been able to pay their premiums and they've become overdue. icare has supported these businesses by deferring their premium payments for a three-to-six-month period, depending on their individual circumstances.

While $64 million in premium payments remain on hold to support these customers, as we learnt in our previous article on COVID-impacts, this amount has declined from its peak in August.

When does a premium become overdue?

First of all, let's look at the different points in the policy cycle where you may need to make a payment on your policy.

These are:

• your renewal
• your premium adjustment at the end of the policy period (often referred to as your 'hindsight adjustment')
• when you make changes to your policy such as increasing your wages.

Each of these payments will have its own invoice with its own unique payment due date. In general, outside of instalment payments for eligible renewals, the standard payment terms are one calendar month. If payment is not made within one calendar month your premium becomes overdue.

What happens if I can't pay my premium on time?

If you are unable to pay your premium on time, it's important to remember first and foremost that your insurance will not expire, and your workers will still be covered. Unlike other insurances, your coverage will continue while we work through a suitable payment option with you.

Once your premium becomes overdue, icare will send you a reminder letter requesting payment. You can expect to receive this letter shortly after the payment due date. Following that, you can expect to receive follow up letters from icare at various intervals.

If your premium remains overdue for more than one month, you can expect to be contacted by Revenue NSW, icare's premium collection service provider, who will work with you to arrange payment.

It's important to note that Revenue NSW does not share details of customers' debts with credit reporting agencies so your credit history rating will not be affected.

In the event that a collection matter is referred to the NSW court system, this may affect your credit rating history. Therefore, if you receive a letter from one of the legal collection providers that work on icare's behalf it's important that you get in touch with them immediately to protect your credit rating.

Late payment fees may also be charged monthly on any outstanding premium amounts. The rate for these fees is prescribed by the State Insurance Regulatory Authority (SIRA) in the Workers Compensation Market Practice and Premium Guidelines (MPPGs).         

What support is available?

When a business is facing financial hardship, it can be difficult to keep up to date with premium payments. Support is available and businesses experiencing difficulties in meeting their payments are encouraged to contact icare as soon as they become aware of this.

It is important to remember that premiums do not necessarily have to be paid in a lump sum. There are a number of payment options available to assist you, including paying in quarterly or monthly instalments, or, in cases of financial hardship, deferring your payment for three to six months.

Since the onset of COVID-19 icare has also encouraged businesses to get in touch if their business circumstances have changed as this may result in a reduction in their wages, and ultimately, a reduction in the amount of premium they need to pay.

Who does the Nominal Insurer partner with to collect overdue premiums?

To help with the collection of overdue premiums icare partners with a number of organisations.

These are:

• Primary Service provider: Revenue NSW, the state's revenue management agency
• Woods & Day Pty Ltd
• TurksLegal
• Craddock Murray Neumann.

If a business has a premium payment that is more than one month overdue, they may be contacted by one of these organisations on icare's behalf to work through how and when the payment will be made.

Revenue NSW is the state's principal revenue management agency and became icare's primary partner for the collection of overdue premiums from 1 September 2020.

This partnership was established to provide a better experience for employers by ensuring overdue premiums are collected in a simple, consistent and fair way. It is hoped that this new partnership will reduce the need for overdue premiums to be referred to the NSW court system, saving NSW businesses both time and money.

What is important for employers to know?

There are a number of things employers can do to keep their premium payments up to date.

Notify icare immediately if you can't pay your premium

As mentioned above, the single most important thing for an employer to remember is to contact icare as soon as possible if you foresee that you may have difficulties with paying your premium on time. This allows sufficient time for icare to talk through your circumstances and the available payment options with you and find a suitable solution before your premium becomes overdue.

Let us know if your policy needs have changed

As mentioned earlier, it's important to check that your coverage meets your current business needs and you're paying the right amount for your policy.

Consider the payment options available

Considering the payment options available and talking to us about the most suitable option for you is also important. Remember there are different ways to pay your premium. Choosing to pay by direct debit ensures you won't miss a payment date.

Keep your details up to date

Keeping your contact details up to date will help ensure you receive all your documentation, including invoices and payment reminders.

Check your invoices carefully

As mentioned earlier, each payment you need to make on your policy will have its own invoice and due date. Check your invoices carefully to make sure you're aware of what's due and when.

Work with our partners–they're here to help you

If you have received letters from Revenue NSW or any of our collections service providers, it is important that you contact them to discuss your payment options.

Importantly, by contacting icare, Revenue NSW or our legal providers, the collection process can be paused whilst we discuss how to get your premiums back on track.

Remember, incentives exist for paying your premium on time

It pays to pay on time. Businesses who pay their renewal premium in full on or before the due date are eligible for a discount of five per cent if you're a small employer and three per cent if you're an experience-rated employer. icare will send you a reminder letter seven days prior to your premium becoming due so keep an eye out for this.

Learn more about workers insurance premiums