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COVID-19: Calculating Insurance Premiums for PPP (Paycheck Protection Program)

The Paycheck Protection Program (PPP) has an aggressive timeline and applicants are struggling to understand how the process works; the confusion specifically revolving around the new and expanded definition of “payroll costs,” which will be used to calculate the maximum loan amount you can receive. 


Unfortunately, most employers aren’t aware that they can add group health coverage and retirement contributions to their “payroll costs” when applying for the PPP.  

The number one question employers are asking is, “How do I calculate these insurance premiums?” 



We've put together a guide for calculating your company's insurance premiums: 

Step One:
Our goal is to determine a 12-month average using a bank statement or insurance carrier bill. Note the two acceptable approaches: 
  1. Calendar Year: January 2018 - December 2019
  2. Rolling: March 2019 - February 2020

Step Two:
Gather a bank statement or an insurance carrier bill that follows the guidelines in step one.

Step Three:
To simplify the calculations, we recommend creating a spreadsheet with headers and columns. We've provided an example below. 

Tip One:

The EMPLOYER contribution is the relevant number, as the EMPLOYEE portion would be accounted for in the payroll calculation. 

Tip Two:

Employment by month is relevant. Employers will need to either pull an Eligibility Report by Month (this can be done in BerniePortal), or pull carrier invoices for the corresponding months they are measuring.  

By following the above Steps and Tips, you will be able to put together a chart that calculates your Insurance Premiums similar to the one found below. 

  March '19 April '19 May '19 June '19 July '19 Aug '19 Sept '19 Oct '19 Nov '19 Dec '19 Jan '20 Feb '20 Total
# Enrolled in Health Plan 49 52 51 52 52 48 48 48 46 43 44 45  
Monthly ER
$175 $175 $175 $175 $175 $175 $175 $175 $175 $175 $175 $175  
Total $8575 $9100 $8925 $9100 $9100 $8400 $8400 $8400 $8050 $7525 $7700 $7875 $101,150


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