Year-End Preparation Best Practices
Year-End Preparation Best Practices
Getting Ready for 2024
As of this communication, the individual work comp code rates for 2024 have not been published and shared. Below is more information from NCCI about the rate filing. We’ve also included best practices for PEO customers to help with their year-end preparations. A successful 2024 starts with a smooth finish in 2023.
NCCI November Update
“The filing recommends a –15.1% rate level decrease in the voluntary market, effective January 1, 2024. Due to the catastrophic nature of the COVID-19 pandemic, all reported COVID-19 claims were excluded from ratemaking in this filing.
The proposed filing is based on experience data for Policy Years 2020 and 2021 as of year-end 2022. Favorable loss experience has been observed in each of these time periods, a primary driver of the rate decrease proposed in the filing.
This year’s trend analysis included consideration of potential upward pressure on medical costs resulting from the Amended Final Order issued by the Florida Division of Administrative Hearings dated May 23, 2023, in the case of Zenith Insurance Company vs. Department of Financial Services, Division of Workers Compensation, Medical Services. As a result, the stop-loss provision contained in the per diem schedule of the 2014 Edition of the Florida Reimbursement Manual for Hospitals is currently considered to be valid.
The final proposed rate level change includes additional changes due to recent medical fee schedule updates and a lower profit and contingency factor—which reflects the higher investment returns expected in today’s interest rate environment.”
Read the full article here – NCCI PDF
Year-End Small Businesses Preparations
Professional Employer Organizations (PEOs) handle various administrative tasks, such as payroll, benefits administration, and HR functions. When preparing for year-end, business owners working with their PEO can significantly streamline year-end processes. It’s essential to work closely with their PEO to ensure all financial and administrative tasks are completed accurately and on time.
Here are some best practices:
Review Employee Data: Verify the accuracy of all employee data, including names, addresses, social security numbers, and wage information. Any discrepancies can lead to issues with W-2 forms and tax filings.
Audit Payroll Records: Ensure all payroll information is up-to-date, including year-to-date earnings, tax withholdings, and benefits deductions. Confirm that all bonuses, commissions, and other compensation have been correctly reported.
Confirm Tax Information: Make sure all federal, state, and local tax IDs are correct and that the PEO has all the information they need to file taxes on the business’s behalf.
Check Benefit Contributions: Review all contributions to retirement plans, health savings accounts, and other employee benefit programs for accuracy. Ensure that all limits have been adhered to and that any necessary adjustments are made before year-end.
Reconcile Accounts: Work with the PEO to reconcile all accounts to ensure that payments made match the payroll records.
Year-End Bonuses and Adjustments: If there are plans to give out year-end bonuses, communicate this to the PEO well in advance to ensure proper processing and tax withholding.
Compliance Check: Confirm with the PEO that the business is compliant with all labor laws and regulations, including the Affordable Care Act, OSHA, and state-specific regulations.
W-2 Review and Distribution: Coordinate with the PEO on the timeline for reviewing, finalizing, and distributing W-2 forms to employees. This should be done before the IRS deadline at the end of January.
Employee Communications: Clearly communicate with employees about important dates and any actions they need to take, such as confirming their address for W-2 mailing or making changes to their benefits during open enrollment.
Review Contractor Information: If the business has used any contractors throughout the year, make sure that the PEO has the necessary information to issue 1099 forms if they are handling this.
Year-End Financial Reports: Request any financial reports that may be needed for year-end analysis or for tax preparation from the PEO.
Plan for the New Year: Work with the PEO to make any necessary changes for the new year, such as adjustments to benefit plans, updates to employee handbooks, changes to payroll schedules, etc.
Evaluate PEO Performance: Assess the performance of the PEO over the past year and determine if the business’s current needs are being met. Discuss any service issues or changes that need to be addressed.
Backup Documentation: Ensure that all year-end reports and tax documents are backed up and stored securely.
By closely collaborating with their PEO and following these best practices, business owners can help ensure a smooth transition into the new year and minimize the stress often associated with year-end preparations.
Bridgely Key Options is one of the premier PEO Broker Agencies in Florida. We are one of the few PEO Brokers that are also an all-lines insurance agency. As a business solution provider, specializing in PEO services and insurance products, we have over 30 years of experience in the PEO industry. We understand the complex needs and requirements of workers’ compensation, general liability, and payroll challenges business owners face.