Professional Employment Organizations and Temp Agencies Claims and Underwriting Perspective

1. Professional Employment Organizations and Temp AgenciesClaims and Underwriting Perspective Presented by: Amy Newton and Theresa Keegan

2. Claims Management and PEO/Temp Agencies Presented by: Amy Newton

3. 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.

4. Master Combo PEO C C C C Co-Employmentendorsements Own policy, e-mod, etc. PEO C C C C C C C 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. MCP (multiple coordinated policy) Co-Employmentendorsements Professional Employment Organization Types Note: Your respective state may have a slightly different interpretation PEO C C C C The PEO has it’s own individual policy as does each of the client companies. No shared e-mod.

5. 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.

6. 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.

7. 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.

8. 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

9. 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.

10. 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.

11. 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.

12. 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.

13. 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

14. 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.

15. Underwriting and Loss Prevention Requirements ForPEO/Temporary Employment AgenciesPresented by:Theresa Keegan

16. 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

17. Rhode Island Workers’ Compensation Insurance Coverage Certification RI State Law: Insurance Carrier issued Certificate Rhode Island’s Workers’ Compensation Insurance 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

18. RI DLT DWC 09

19. 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

20. 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

24. Job Descriptions All employees must be provided with written job descriptions for any new job assignments at the client company

25. Accident Investigations PEO/Temp Agency is required to conduct and document accident investigations for all claims.

26. PEO/Temporary Employment Agency Requirements Loss Prevention Procedure includes an audit of: Worksite Evaluation forms (WSE) Safety Training documentation Accident Investigation records

27. Job and Safety Training Safety training and functional job training documentation Certifies all employees are trained for the positions in which they are placed

28. Job and Safety Training Documentation required: Instructor name Topic Date Employee signature

29. 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

30. Client Site Visits PEO/Temp Agency must work with Loss Prevention consultant: Coordinate site visits with client companies Accompany Loss Prevention consultant

31. 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)

32. Premium Audit Typically quarterly or semi-annually Staff premium auditors List of premium audit requirements

33. 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

34. 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

35. QUESTIONS ?