professional employment organizations and temp agencies claims and underwriting perspective
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Professional Employment Organizations and Temp Agencies Claims and Underwriting Perspective. Presented by: Amy Newton and Theresa Keegan. Claims Management and PEO/Temp Agencies. Presented by: Amy Newton. Background Information. - PowerPoint PPT PresentationTRANSCRIPT
Professional Employment Organizations and Temp
AgenciesClaims and Underwriting
PerspectivePresented by:
Amy Newton and Theresa Keegan
Claims Management and PEO/Temp Agencies
Presented by:
Amy Newton
Background Information
• What’s a Professional Employment Organization (aka employee leasing company or PEO)?
– PEO assumes or shares employment responsibilities for all of the employees of the client company. They should not be confused with “temp services”.
– The client and the PEO are contractually joined via a co-employment endorsement.
Professional Employment Organization Types
Note: Your respective state may have a slightly different interpretation
PEO C C C C
PEO C C C C
C C C
PEO
C C CC
The PEO and all clients have coverage under 1 policy with 1 e-mod for all.
The PEO and some clients share coverage under one policy while other clients have individual policies with their own separate e-mods.
The PEO has it’s own individual policy as does each of the client companies. No shared e-mod.
Co-Employment endorsements
Co-Employment endorsementsOwn policy,
e-mod, etc.
Master Combo
MCP (multiple coordinated policy)
Why Is It Tough to Manage PEO Claims?
• PEO’s may refuse to allow direct contact with the policyholder.
– So why is that a problem for us? It creates an unnatural barrier between the insurer and the policyholder. Direct contact with the policyholder is always preferred.
The PEO Barrier
• Safety consultants are not allowed to meet with the policyholder.
• PEO’s will use forms of their own to avoid using documents from the insurer.
• Will not allow claim adjusters to conduct investigations with the policyholder directly.
• May cause meeting delays due to accommodating several schedules.
The Barrier Grows and Grows
• The first report of injury delay. It costs us all money.
• Delays occur in notifications of return to work which result in overpayments.
• Policyholder confusion over settlements and other legal issues.
Lack of Knowledge
• PEO’s may not have the knowledge to handle difficult claim situations.
– Lack of legal resources
– Unable to keep up on law changes
– Use of antiquated forms
– PEO staff may be handling several different areas (HR, payroll, safety, etc.)
– PEO staff turnover – we can’t keep up on the education
PEO versus the Policyholder
• The PEO and the policyholder may have different views on settlement, legal issues, or return to work.
– This can result in a claim languishing until the PEO and the client come to an agreement on the approach.
A Good PEO Partnership
• PEO’s can assist the claim adjuster in getting a policyholder on board with a tough claim issue (settlement, reserves, return to work, or litigation).
• The PEO may be able to provide immediate wage documentation for the claims adjuster.
A Good PEO Partnership
• The claims adjuster may benefit from having one PEO contact person for many different policyholders.
• A savvy PEO will proactively seek claim updates and provide those to the policyholder – relieving the claims representative of that responsibility.
How to Create a Strong PEO Relationship
• Know your PEO (claim) staff.
• Be visible with the PEO and their claim staff. It’s all about relationships.
• Consider providing the PEO with online access to claim information.
• Ask for feedback on when they want to know about reserves, settlements, etc.
More on Relationships
• Consider setting up a periodic claim review. It helps with:
– Building relationships
– Providing claim-level action plans
– Providing education to the PEO
Claim Review Hints
• Schedule them regularly
• Provide a form with consistent content:– Basic claim info– Reserves– Action Plan– Obstacles
• Approach from a marketing perspective– Assemble the forms
in a binder– Put your logo on it– Include frequently
needed phone numbers
• Include necessary staff such as RN’s, etc.
Underwriting and Loss Prevention Requirements ForPEO/Temporary Employment Agencies
Presented by:Theresa Keegan
PEO/Temporary Employment Agency Requirements
• Objective:
– Partner with the PEO/Temp Agency
– Ensure safe working environment for their employees
– Educate insured as to services we provide
– Provide tools for effective administration of Workers’ Compensation program
Rhode Island Workers’ Compensation Insurance
Coverage Certification
• RI State Law:
– Insurance Carrier issued CertificateRhode Island’s Workers’ CompensationInsurance Coverage Certification (DWC 09)
– If a client company does not have a carrier issued certificate, then the leased employee will be considered an employee of the client company
RI DLT DWC 09
Underwriting Requirements
• All new client companies must be reported to insurer within 48 hrs
• Executed Contract between PEO/Temp & client companies
• Completed Work Site Evaluation form (WSE)• Completed Job Descriptions• Conduct Accident Investigations• Documented Safety Training• Loss Prevention – Client Company Site Visits
Work Site Evaluations
• WSE for all client companies prior to placement of employees at the client co.
• WSE reviewed during loss prevention visits
• Additional worksite inspections may be required
• Loss prevention and underwriting are available to assist in training PEO/Temp Agency in completing/collecting WSEs
Job Descriptions
All employees must be provided with written job descriptions for any new job assignments at the client company
Accident Investigations
PEO/Temp Agency is required to conduct and document accident investigations for all claims.
PEO/Temporary Employment Agency Requirements
Loss Prevention Procedure includes an audit of:
• Worksite Evaluation forms (WSE)
• Safety Training documentation
• Accident Investigation records
Job and Safety Training
• Safety training and functional job training documentation
• Certifies all employees are trained for the positions in which they are placed
Job and Safety Training
Documentation required:
• Instructor name
• Topic
• Date
• Employee signature
Reassignment of EmployeesThe PEO/Temp Agency’s Policy
• Language in client agreement/contract
• Employees must remain in positions they are assigned
• Client company must contact PEO/Temp Agency for approval to change
• Document that employee is properly trained for new job assignment
Client Site Visits
PEO/Temp Agency must work with Loss Prevention consultant:
• Coordinate site visits with client companies
• Accompany Loss Prevention consultant
Client Site Visits
Periodic site visits at client company locations on an as needed basis:
• Nature of exposure
• Number of employees
• Proper loss prevention controls
• Injuries (analysis of loss trends)
Premium Audit
• Typically quarterly or semi-annually• Staff premium auditors• List of premium audit requirements
Premium Audit Records and InformationFor PEO/Temporary Employment Agency
Required:
• Payroll Journal/Register
• Payroll Separated by Client Company
• Sales by Client Company
• Employer’s Quarterly Federal Tax Return – form 941
• State Quarterly Tax and Wage Report – RI DET-TX-17
• Cash Disbursements Journal / Business Checkbook
• 1099’s / 1096
Premium Audit Records and InformationFor PEO/Temporary Employment
Agency
The following additional information may be requested:
• Files of the invoices to client companies for random samplings
• Photocopies of checks / payments from client companies (first audit on new account)
• Invoicing/billing reports
• 1120 Federal Tax Return
• Bank statements
• Job orders if utilized
• General ledger or Profit and Loss Statement
QUESTIONS ?