Zorro Pay also has an amount set aside in your account as a reserve.
The reserve serves as a cushion of funds in your FBO account to cover unexpected costs, such as additional employees opting in for coverage beyond what you initially estimated, or an employee adding a dependent mid-year.
With Zorro Pay, virtual cards are created each time an employee submits a plan election on the platform. Because we must have sufficient funding to cover and create all cards, if there isn’t a sufficient balance in your account, we pull funds on the same day, without prior announcement or notification. This both creates unexpected events in your bank account, and slows down or creates errors for the Enrollment Team when submitting applications to carriers.
The reserve balance helps prevent this from happening, allowing Zorro to efficiently approve and create these cards.
If funds from the reserve are used, we will draw the difference to replenish the reserve during your next scheduled monthly premium draw, rather than making unexpected withdrawals mid-month.
For example, if you anticipate 100 employees enrolling in a plan, each plan costs $1,000 monthly, and your reserve is $10,000, your initial pull would be $110,000.
If 105 employees end up enrolling, the $10,000 reserve would prevent the need for Zorro to pull $1,000 on 5 separate instances. Instead, the $10,000 reserve would be utilized for those 5 extra enrollments. Then, the $5,000 that was utilized would be replenished on the next monthly pull to maintain the $10,000 reserve amount in the account.