the round table

Professional Employer Organization (PEO)
Workers Compensation

Professional Employer Organizations (PEOs):  How We Can Help.  The entities most likely to be challenged by insurers are PEOs.  We know PEOs and we know their workers compensation issues.  We wrote the book on most all of the issues affecting PEOs.

Why You Should Consider Us:
Because We Literally Wrote the Book on These Issues.

Yes, you could say we Wrote the Book:

  • On audits;
  • On the Classification System (class code);
  • On the Experience Mod System;
    (or the e-mod; or the experience modification factor);
  • On the formula for High Deductibles;
  • On the definition of “Payroll” for purposes of calculating premium;
  • On all PEO workers comp issues, such as proper corporate combinations for e-mod calculations;
  • On the formula for Retros;
  • On the formula for schedule rating;

Because we did.  And All of these items drive the final calculation of your workers' comp premium.  

Why You Should Consider Us:  We Know This Stuff. 

After all, during our years at the National Council on Compensation Insurance (NCCI), that was precisely our job.  NCCI set the rules of the road for audits; the Classification System; for the calculation of e-mods and High Deductibles and Retros and scheduled rating.  And while at NCCI, we wrote the rules of the road for PEOs as to workers' compensation. 

Together with our staff:

  • We oversaw all the rules that are applied to audits;
  • We wrote the descriptions for the 600+ Classifications in the Scopes Manual;
  • We wrote and implemented the U.S. e-mod system; including its formulas;
  • We created and implemented the complex formulas for High Deductibles;
  • We authored and implemented the definition of “Payroll”;
  • For PEOs, we wrote the rules for corporate combinations for their e-mods; and most of the other rules that effect PEO premium;
  • We created and implemented the complex formulas for Retros;
  • We created and implemented the complex formulas for schedule rating;
  • We wrote the definition of “Payroll” for determining workers compensation premium;
  • We authored and filed some 500 statewide rate filings used throughout much of the U.S., setting the premium levels on about $15 billion of workers compensation premium – every year;
  • We gained regulatory approval to use all of the above formulas and rules;

Earlier in his career, as Iowa Commissioner of Insurance, Bill Hager judged each of these matters and approved or modified the rules as submitted to the Department of Insurance. 

Overall:  PEO Issues: We Can Help.  We have the background and experience to provide direct help to PEOs in connection with their relationship with their insurers.

 Please contact Bill Hager at 561-306-5072 or bhager@expertinsurancewitness.com for more information.

Letters of Credit: We Can Help.  We know what is behind PEO issues like letters of credits and monies posted versus insurer refusal to release these funds.  We know issues can occasionally arise such as disagreement as to the amount of credit required by insurers from the PEO.  We can help because we know how to interpret these contracts and accurately calculate related amounts required to be posted.  For example, the contract may call for a percentage of annual claim activity to be posted to the insurer as letter of credit.  We know how to fairly determine such amounts. 

Corporate Combinations for E- Mod Purposes: We Can Help.  We know the rules on the combination of corporate and organizational entities as it relates to re-setting the e-mod.  This is so because we wrote the rules and can determine whether the e-mod has been accurately calculated against the corporate combination rules.  

Audits of PEOs:  We Can Help.  Insurer audits of PEOs is no minor matter.  It is not unusual for the PEO to be presented a significant bill for additional premium.  Sometimes insurance company audit conclusions are not fully supported.  Sometimes the audit conclusions arrive at the PEO’s doorstep in the form of a demand for additional premium, as opposed to a clear statement of the audit findings and an unambiguous calculation as to how the insurer arrived at the additional premium owing.

New Incoming Employees to the PEO: Is There Coverage? We Can Help.  For example, the issue can arise as to whether the PEO’s new clients should rightfully have been insured by the insurer; where the insurer initially rejects a claim, contending that the new client was an impermissible insured or was not an insured. 

Unlisted Employee: Is There Coverage?  We Can Help.  For example, the issue can arise as to an individual employee, where the PEO has instructed the underlying employer to provide a list of employees and an injury occurs to a non listed employee;  where the employee was recently hired and the insurer rejects the claim as a non employee.  

 Please contact Bill Hager at 561-306-5072 or bhager@expertinsurancewitness.com for more information.


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