NCOIL Puts Off PEO Model

The National Conference of Insurance Legislators has postponed action on a model law regulating workers' compensation insurance coverage for professional employer organizations (PEOs).

State lawmakers at the spring meeting in Savannah last week put off final consideration of the model legislation until the NCOIL summer meeting in Seattle.

PEOs are entities that contract with businesses to assume some human resource functions and also some responsibilities of employers.

The proposed legislation would require that any such PEO be registered with an appropriate state agency before an insurer could contract with it to provide workers' compensation coverage.

The law would permit either the PEO or its client to assume the responsibility of obtaining workers' comp coverage, but the PEO client would retain ultimate responsibility for ensuring that all state requirements are met.

The rates for such coverage would be based on the client's experience, rather than that of the PEO itself, according to the law.

At a previous NCOIL meeting, Tim Tucker of the National Association of Professional Employer Organizations said workers' comp coverage is a critical issue for the group and commended the lawmakers for taking up the model law.