How am I billed for insurance if I've signed up for insurance through Justworks?
We bill the company for the full cost of insurance one month prior to coverage. We will bill you on the first pay-cycle each month.
For example, if your insurance begins April 1 and your first payroll is in the middle of the month (March 15), you will be billed the full cost of April insurance with that March 15 payroll. If your first payroll was instead at the end of month, March 31, you will be billed the full cost of April insurance with that March 31 payroll.
The employee's insurance deductions occur in the month they are receiving insurance coverage.
Those on a semimonthly pay frequency will see their medical, dental, and/or vision deductions split evenly over their two regularly scheduled paychecks in any given month. For example, if both the 15th and 30th of April fall on normal business days, the first half will be deducted on their April 15th payment and the second half will be deducted on their April 30th payment.
Since employees who are paid on a biweekly pay frequency are paid twenty-six times per year, and not twenty-four, there will be certain months in which they are paid three times. In these cases, the deductions will be taken out of their first two paychecks of the month.
To summarize, the employer pays the full cost of insurance up front during the month prior to coverage and the employees contribute during the month their coverage is active.
Since billing for the company occurs one month prior to the coverage month, March's premium would be due on February 15. If the company did not start using Justworks insurance until March 1, Justworks would not be able to charge the company in February.
In this case, Justworks would charge the company on March 15 for both March’s premium (to catch up on what was due) and for April’s premium since that is also due on March 15 (due to Justworks billing one month ahead). This results in what appears to be a double bill on March 15.
Moving forward, your company will only be billed one month in advance based on the previously mentioned schedule. The next charge would be on April 15 for May’s premiums.
In the event that an employee is terminated and their premium has already been paid, that premium will automatically be paid back to the company as a credit. If an employee is terminated on March 31, the company will receive a credit for their premium in April.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.