Highlights of the Proposed $1.9 Trillion Stimulus Package

The House of Representatives has passed its version of the proposed stimulus bill, which includes extended unemployment benefits, direct checks to individuals and more. The bill is now with the Senate, where some provisions will likely change. Democrats hope to pass the $1.9 trillion relief package by mid-March, before existing COVID-19 relief measures, such as enhanced unemployment insurance, expire.

The bill could pass a Senate vote in the coming weeks, but it may face significant challenges amid a 50-50 party split.

It’s important for employers to have an idea of what to expect. To that end, this article outlines the most relevant aspects currently known about the bill—these components are likely to change as Congress hashes out its details.

Small Business Assistance

The proposed bill intends to invest billions toward small business assistance, and even provides heavily impacted businesses with fewer than 10 employees priority with some of the funds. Here is the current funding breakdown:

  • Emergency Injury Disaster Loan program: $15 billion
  • New grant program for bars and restaurants, specifically: $25 billion
    • Eligible businesses could receive up to $10 million, using the money for payroll, rent, utilities and other expenses.
  • Paycheck Protection Program: $7.25 billion

Stimulus checks

Just like the two other COVID-19 stimulus packages passed during the pandemic, this version will also feature direct payments to Americans. This time around, eligible recipients can expect $1,400 per person ($2,800 for couples), including adult dependentsa family of four could get up to $5,600.

However, payment parameters are stricter this time around than with previous stimulus checks. The full check amount will go to individuals earning under $75,000 (or $150,000 for couples), with payments cut off entirely for individuals earning over $100,000 (or $200,000 for couples). Anyone with income between those figures will receive a reduced check.

Unemployment Aid

The proposed bill seeks to extend two previously established pandemic unemployment assistance efforts: the Pandemic Unemployment Assistance Program and the Pandemic Emergency Unemployment Compensation program. The financial assistance from these programs is currently set to expire in mid-March, pressuring legislators to act quickly.

The bill also seeks to enhance unemployment assistance payments from the current $300 per week to $400 per week. Unemployed gig workers, freelancers, contractors and others who previously qualified for aid will continue to be eligible under these programs.

Under the proposed bill, these programs and their financial aid would be extended through Aug. 29.

Housing Assistance

This proposed stimulus plan intends to set aside billions in financial aid to homeowners and renters. Here is the current funding breakdown:

  • Aid for back rent, rental assistance and utility payments: $19.1 billion
  • Aid for mortgages, utilities and property taxes: $10 billion
  • Aid to states and localities to help individuals at risk of becoming homeless: $5 billion

Paid Sick Leave

Previous stimulus packages guaranteed workers two weeks’ pay if they couldn’t work due to COVID-19-related reasons. The current proposal does not extend these benefits. However, employers that choose to continue offering this paid sick and family leave through Oct. 1 may receive a tax credit.

Minimum Wage

The proposed bill would gradually increase the federal minimum wage to $15 per hour by 2025. It would also mandate that tipped employees, youth workers and workers with disabilities all receive the full federal minimum wage. This change would affect the wages of 27 million Americans. However, this particular proposal is hotly contested, and there has been speculation that it may need to be scrapped in order to secure the requisite number of votes to pass.

Update: Due to congressional rules, this provision will almost certainly not appear in the final bill after going to the Senate.

Aid to Schools and Child Care

A significant portion of the stimulus bill involves aid to states, including schools and child care facilities. Here is the current funding proposal:

  • Aid for getting K-12 schools ready for in-person learning: $130 billion
    • Money could be used for purchasing protective equipment, improving ventilation systems and preventing teacher layoffs. However, 20% of the money schools receive must be used to address pandemic learning loss—for example, extending learning time into the summer.
  • Aid for colleges: $40 billion
    • Institutions would be required to spend at least 50% of their allocated funds on emergency financial aid grants to students.
  • Child care provider assistance: $39 billion
    • Funds may be used for payroll, rent, protective equipment and other expenses.

Tax Credits

The stimulus bill aims to provide child tax credits to more low-income families. The bill proposes $3,000 for parents of children under the age of 18—$3,600 for parents of children under the age of 6. This credit would also become fully refundable.

The bill also seeks to expand the earned income tax credit for individuals without children. The maximum credit would be nearly tripled under the stimulus proposal, and eligibility would be expanded—the childless tax credit eligibility age would be reduced to 19 years of age, down from 25.

Aid to states, local governments, tribes and territories

The proposed bill would provide billions in financial assistance to states, local governments, tribes and territories. It’s currently unclear whether there are specific usage requirements tied to this assistance, or whether funds may be used however the entities deem fit. Here is the current funding breakdown:

  • Aid to state and local governments: $325.5 billion
  • Aid to tribes and territories: $24.5 billion

Summary

Again, these proposed figures are subject to change as Congress continues its debate over specific policy aspects. Some aid amounts are wildly above what some legislators deemed appropriate, signaling a contentious battle ahead.

Thank you for being part of our PEO Compass information outlet. Contact us at Libertate Insurance for your PEO and Workers’ Compensation needs.

Report on PEO in Florida is Submitted

The report this report issued by The Office of Program Policy Analysis and Government Accountability (“OPPAGA”) in Florida, is clearly one commenced with negative overtones and questionable timing. As Senate Bill 820 looms in the background, this appears to be the “made for order” white paper to justify it. It is unfortunate that the issue of uninsured employers has been misconstrued with some sort of “gap in coverage” in workers’ compensation if a Professional Employer Organization is utilized. This is just not the case. A gap in coverage exists when a business does not buy insurance for its employees and that should be the focus of fixing the root issue of the uninsured employee.

The scope of the report is:

  1. “What is the relationship between PEO’s and insurance carriers, and how might workers’ compensation coverage differ for businesses that use PEO’s?”
  2. “How can the relationship between a PEO and its client companies lead to a workers’ compensation coverage gap?”
  3. “What has been the history of PEO-related workers’ compensation insurance carrier insolvencies in Florida?”
  4. “Can PEO’s offering workers’ compensation coverage have an effect on the workers’ compensation insurance market, including premiums for other businesses?”
  5. How have other states addressed PEO regulation and PEO-related workers’ compensation insurance coverage gaps?”
  6. What options could the legislature consider to address PEO regulation and PEO-related workers’ compensation insurance coverage gaps?”

According to the Director of the Florida Association of Professional Employer Organizations Robert Skrob:

“Since the creation of the workers’ compensation system, employers fraudulently paying employees cash under the table has been a problem. That why the law  holds general contractors responsible for what happens on their job sites.  Shifting that responsibility away from general contractors would lead to more workers’ compensation fraud by letting general contractors who don’t adequately oversee their worksites avoid responsibility.

Contractors who cheat the system by not providing workers’ compensation coverage for all people who work for them put those workers in danger. The Florida Legislature should eliminate the financial motivation and incentives built into the system that encourage workers compensation fraud in construction by increasing the number of jobsite investigations to keep up with the growth in the construction industry, and by holding the cheaters responsible.

There are a number of proposed bills which would implement some of the recommendations within this report. Together with NAPEO we will fight the proposals contained within this report.”

We could not agree more and look forward to helping any way possible to address the issue of the occupational uninsured. Not buying insurance for your employees is a crime.

From an insurance perspective, the real issue – taking care of the claimant, is addressed in most states through the administration of an “Office of Uninsured Employers”. If your employer did not buy workers’ compensation, you go to the State, the claimant’s benefits are funded, the employer is investigated/penalized and the fund is replenished. In Florida, if you are hurt and your employer has not purchased insurance, your primary recourse is to contact a personal injury attorney. “It’s free”, until their contingengies are triggered on what is already rightfully due tohe claimant. This is how it works in Florida in regard to uninsured employees of uninsured employers regardless of a PEO being involved or not.

We will be reviewing the OPPAGA report in detail and provide additional insight on it before the weekend.

Managing COVID-19 Employment Practice-Related Exposure

We found this article, made available by Insurance Journal, most informative. The original content can be accessed by clicking here.

This post is part of a series sponsored by The Hanover Insurance Group.

As the pandemic continues, we’re seeing new COVID-19-related regulations, restrictions and advisories issued and adjusted by federal, state, and local officials on a regular basis. Each jurisdiction can create and enforce its own laws, leaving many employers faced with varying—and at times conflicting—orders and guidance. This creates a decision point for employers. Which should they follow? And, how can that decision impact their business?

From decisions about workplace safety, such as personal protective equipment, visitor policies and vaccine requirements, to handling work-from-home, family, and medical leave requests, there are a lot of business issues to sort through and a great deal of exposure, which could leave them open to the threat of an employment-related lawsuit. As trusted advisers to these businesses, independent agents can help guide their clients through the maze of regulations and guidance, sharing thoughtful risk management practices and key coverages to evaluate.

Growing threat of litigation

More than 2,000 COVID-related employment lawsuits have been filed already, and the number is expected to grow as businesses respond to ever-evolving circumstances. Business leaders can prepare by educating themselves and seeking out resources and guidance to navigate health, safety, and economic issues. Whether it’s subsequent waves, a change of jurisdictional guidance and/or regulations, or the availability of a vaccine, forward -thinking leaders will be well prepared to understand the options and their impact and make informed, proactive decisions.

With the pandemic, employers should be especially mindful of the following types of employment practice claims:

  • Workplace safety: Allegations of failure to provide a safe working environment
  • Discrimination: Allegations of age and disability bias in employment termination
  • Wage and hour: Allegations of failure to pay non-exempt employees for remote work or time spent completing employer-mandated COVID-19-realted health and safety activities, such as daily screenings
  • Retaliation: Allegations of retribution for complaints about workplace safety or use of medical leave

Thoughtful risk management

With questions like ‘can employees be required to get a COVID-19 vaccine?’, ‘how do we manage continued work-from-home requests?’, ‘what accommodations should be made for employees with disabilities?’, and ‘how do we address employees’ workplace safety concerns?’, it can be difficult for businesses to know where to start. Independent agents can play an important role in helping their clients think critically about their risks and take proactive steps. Similarly, top insurance carriers understand this, and have acted to provide employers with guidance and services that can help them minimize the risk of litigation.

For example, The Hanover has negotiated agreements with leading labor and employment practices firms to offer a range of services to Hanover policyholders that can help reduce the risk of employment practice lawsuits related to COVID-19. These value-added services are offered to policyholders no cost, or at a significant discount, such as:

Holistic insurance solution

  • COVID-19 return-to-work guide, including a robust testing and screening guide, sample policy language and detailed guidance on workplace safety, disability accommodations, and more
  • Family First Coronavirus Response Act compliance assistance, including sample policies, template forms, a flowchart for managing requests and attorney consultation
  • COVID-19 online training module for employees on personal hygiene practices and more
  • A COVID-19 customer information center with key information from the CDC, EEOPC, and state-specific resources

Beyond risk management, agents can help their clients by partnering with insurance carriers that offer employment practices liability insurance that can be tailored to the needs of each business.

As businesses wonder if they have adequate insurance protection, agents can help them understand their coverage and identify possible risk areas by considering these three important factors:

  1. Definitions: As agents know, not all definitions are created equal. Carefully assess definitions of wrongful acts to ensure a business’s unique risks are covered.
  2. Who to cover: Ensure coverage applies to the acts of all individuals who work at the organization. For example, does the business use contractors?
  3. Key coverage provisions: These should include punitive damages where insurable, and coverage for Equal Employment Opportunity Commission or state equivalent proceedings.

As the COVID-19 pandemic continues to evolve, employers face increasing risks from employment-related lawsuits. Fortunately, agents can play an important role in guiding their business clients to risk management practices and coverages that help best protect their operations, their interests, and their employees.

Disruption in the Marketplace

This post utilized content from Property Casualty 360’s Heather Turner & PRNewswire.

On January 4th, 2021 PRNewswire announced Philadelphia Insurance Companies (PHLY) acquisition of the Staffing Insurance Business offered by Worldwide Specialty Programs, Inc. The transaction closed on December 31, 2020 complimenting PHLY’s broad suite of specialty services. PHLY markets and underwrites commercial property/casualty & professional liability insurance products. PHLY has an “A++” (Superior) rating by AM Best Company.

We anticipated the post-acquisition news being focused on PHLY’s delivery of industry-specific services to the temporary staffing space. Similarly, we are committed to a different industry niche, the Professional Employer Organization (PEO). We remain hopeful that PHLY will continue to support PEO, just as World-Wide has done for many years.

Entering the 2nd Quarter of 2021, uncertainty has become part of our new normal. In a recent article, Property Casualty 360 discussed fluctuation within the marketplace (4th Quarter 2020 – 1st Quarter 2021). Pre-COVID validated the firming of the marketplace. The initial impact increased underwriting scrutiny, rate increases, higher retentions, jurisdictional scrutiny and capacity reduction. As a result of COVID-19 related case uncertainty, higher than normal judgements, and developing CAT losses, there has been a continual hardening of the market. We expect rate increases, lowering capacity, limiting or transferring risk, and insurers scrutinization of risk profiles.

In conclusion, industry and marketplace changes or shifts have always been and will continue to be.  As the industry constricts, options, terms and conditions tend to constrict with it.  Your upcoming casualty lines renewal may look different, and we highly recommend staying out in front of it.

With that being said, contact Libertate Insurance Services for all your PEO-related insurance needs by emailing us here.

Protecting Your Organization Against Cyber Attacks

In today’s world everyone is susceptible to cyber attacks. In recent years, cyber attacks have emerged as one the more significant threats facing organizations of all sizes. According to a recent report from the information Systems Audit and Controls Association (ISACA), cyberattacks currently reign as the fastest growing form of crime. Some of the most common cyber attacks from 2020 were social engineering, ransomware, software update issues and web application attacks. These attacks can carry serious consequences for your organization-including lost data, disrupted operations, revenue loss, and legal fees. Consider the following measures to protect your organization from ransomware attacks:

Educate your employees. The biggest threat to your cyber security is your employees. According to historical claim data analyzed by Willis Towers Watson, 90% of all cyber claims stemmed from some type of employee error or behavior. Train your employees on how to prevent and respond to a malware attack.

Implement smart software. Install strong spam filters, anti-virus and malware programs, firewalls and patch management systems on all devices.

Enforce access controls. Only allow trusted, competent and qualified individuals access to sensitive systems or data. Such as multi-factor authentication, VPN and remote desktop protocol.

Ensure business continuity. Be sure to back up data frequently. In additional, conduct annual penetration testing and vulnerability assessments.

Ensure adequate coverage. It’s crucial to secure proper insurance coverage to stay protected in the event of a cyberattack. After all, even with proper cybersecurity measures in place, attacks can still occur.

The below link is a Cyber Risk Exposure Scorecard. After completing all of the questions, total the score to determine your organization’s level of cyber risk.

At Libertate, we want to insure that every organization is protected and prepared. We offer the following solutions and services for PEO’s and their client companies.

  • We have access to over 25 cyber carriers for the PEO.
  • Master cyber programs to protect PEO client companies.
  • Incident response platform to help identify cybersecurity issues. The cloud based platform has a 100% detection and close ratio. It is also backed by a $250K warranty should it fail the end user.
  • Our experts can evaluate your current cyber coverage that is placed outside of our agency.

For additional cyber security guidance and insurance solutions, contact us today at sales@libertateins.com.

How Can There Be a Gap in Coverage?

…if coverage does not exist in the first place!

We have argued appropriately that coverage cannot exist based on a lack of insurable interest of the non co-employed employee. Not co-employment, not who was or was not payrolled, someone in the system knowingly committed fraud or else coverage would exist. This is not a “gap”, it is “black and white” in terms of coverage being purchased/provided or not.  The beauty of the workers’ compensation system is “The Great Tradeoff” – if you as the employer buy workers’ compensation (wc), you are protected from suit. Said simply, pay the wc insurance premiums and the employee base will be taken care of to the letter of the law.  In all States and DC (except TX, OK and NJ have opt out provisions), workers’ compensation is a mandatory purchase at certain employee counts (4 + typically).  There is no excuse to be ignorant of the need for workers’ compensation nor to pay the premiums necessary to ensure the proper medical and lost time payments due to an injured worker.  In all States, penalties and misdemeanors/ felonies follow with the lack of purchase of wc. 

In NO state is an industry group targeted as a proposed safety net to those that have failed to purchase insurance and committed fraud.  Instead, the fraudsters have a safety net to take the heat off them for not purchasing wc and doing the right thing in the first place. Since all states manage workers’ compensation differently with their own unique rules and rate sets, it falls upon each State to manage the occupational accident and illness exposure of its citizens.

Every state has some form of “subsequent” or “second injury” fund to make sure the cost of employers to hire prior workers’ comp claimants is offset and affordable.  This form of labor umbrella allows for employees to find gainful employment without putting their employers at increased financial risk based on prior events/claims.

Thirty-nine states/district out of 51 have what is generally known as an “Uninsured Employer Fund” (UEF).  In these states, it is all about making sure the injured worker(s) get treatment and benefits first, with the responsibility of the lack of insurance investigated at the same time with the appropriate parties.  The employer(s) whom were responsible for not buying insurance are held accountable, and most importantly, the claimant gets the benefits they deserve without delay and hopefully litigation.

The following 12 States do not have a UEF in order of population:

  • Texas (opt outs allowed)
  • Florida
  • Georgia
  • North Carolina
  • Indiana
  • Alabama
  • Louisiana
  • Iowa
  • Mississippi
  • Arkansas
  • Nebraska
  • Vermont

In these states, for the innocent claimants that have unscrupulous employers that do not wish to purchase workers’ compensation, there is little recourse outside of litigation.  

Not buying wc is fraud. Go after the perpetrators of the frauds and allow for a safety net for those that should matter the most – those the system is built to serve – the claimants.  An uninsured employer fund makes certain the Florida worker is covered, with the bill to be determined post-investigation.

It should be noted that either the Department of Labor or Department of Insurance of most UEF states are the governing authority and therefore something new would not need to be created.  A few states DCBS’ also handle.

Employment Practices Liability Scorecard

As employees continue to be furloughed or laid off around the country and the risk of unemployment ever looms, employment practices liability (EPL) claims have increased measurably.  Even if an employee is terminated for legitimate reasons, every termination opens the door for potential lawsuits.  One of the best ways an employer can help protect themselves from sustaining EPL claims is to be educated and proactive. 

Here is an Employment Practices Liability Scorecard which any employer can use to determine how at risk they may be for sustaining an EPL claim. 

To learn about EPL insurance and how it can help protect your organization, speak to your insurance professional.  

Happy Women’s History Month from PEO Compass!!

In addition to the United States, Women’s History Month is celebrated in the UK and Australia. Though declared a formal ‘month’ by Congress in 1987, many have been celebrating the vital role of women dating as far back as March of 1911!

To discover more, visit the National Women’s History Museum or the Women’s History Month website sponsored by the Library of Congress.

For NAPEO members, this Thursday is the next Women in NAPEO (WIN) event of which Libertate is a proud sponsor. Teresa Carroll, President of Oasis, a Paychex Company will discuss the habits and behaviors that are holding women back as outlined in the book How Women Rise by Sally Helgeson and Marshall Goldsmith. For registration information, click here.

Finally, as a woman who has been fortunate enough to be surrounded by intelligent hard-working female role models her entire life (my grandmother being one of them – pictured below), I am so proud of this month! Sharlene Singleton, here’s to you!