NEW PEO Coverage Bill 2024
It is not of great secret that some legislators in Florida have targeted the PEO industry in the past and have not fully grasped the concept of co-employment. Usually on matters of competitiveness due to the pricing advantages PEO’ bring to small businesses who would not be eligible for the same levels of product on their own. Unfortunately, the political community is sometimes not educated on PEO (“co-employment”), oft confuses it with staffing (due to leasing vernacular) which produce bills such as this one that miss the mark. Insurable interest comes from co-employment (aka leasing) and without it there is no ability combine clients onto one policy as is customary with Florida PEO’s. Forcing the PEO to provide coverage to all clients will also be of interest to those “payroll company” based PEO’s whereby PEO is one option, but many other also available such as “pay as you go” or Administrative Services Only (“ASO”).
From our friends at workcompcentral.com -
“PEO Coverage Bill Back Before Lawmakers
A Florida state senator is taking another run at legislation that would require employee leasing companies to provide comp coverage for all of a client’s workers if the client company does not have coverage itself.
Sen. Keith Perry, R-Gainesville, on Friday introduced Senate Bill 1658, which is similar if not identical to SB 820, which died in the Senate Banking and Insurance Committee in 2021.
The purpose of the bill is to ensure that an employer that leases some or all of its workers properly obtains workers’ compensation coverage for all and that premiums paid by the leasing company are commensurate with exposure and anticipated claims experience.
SB 1658 would require the insurer of an employee leasing company to provide comp coverage for all leased and nonleased employees of the client company if the client company doesn’t have a separate comp policy.
The bill would take effect July 1.”
After no proposed legislation in Florida targeting the PEO industry in some years, here we go again. In essence, this would make it very hard for a PEO to aggregate their respective portfolios of business which ultimately will hurt small business pricing and increase writing into the “Market of State Resort”, aka The Florida Joint Underwriting Association.
I hope cooler heads prevail as they have in the past, but one to watch and not take lightly. See you in Tallahassee ---
Author: Paul Hughes
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