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    Alice Barghini   
503-947-7544   

Employee Leasing Policy Identification
Oregon policy filings-tracking of client experience

Oregon law requires all employers with one or more subject workers to provide workers' compensation insurance. The employer can obtain workers' compensation coverage:
Directly through an insurer
By becoming certified as a self-insured employer, or
By obtaining coverage under a worker leasing arrangement

In a worker leasing arrangement, a worker leasing company, referred to in this article as a PEO (professional employer organization), may provide the workers' compensation coverage for the workers. In Oregon, the coverage under a worker leasing arrangement is provided by one, and only one, of the following:
The client's workers' compensation insurance policy,
The self-insured employer, or
A worker leasing company's workers' compensation insurance policy

If a client has obtained its own policy or is certified as a self-insured employer, coverage automatically defaults to the client's coverage, regardless of the coverage the worker leasing company may have.

Policy Requirements and Reporting Rules
Oregon law (ORS 737.270, ORS 656.850) provides coverage, premium, and reporting requirements for worker leasing companies. Under Oregon law, the experience rating must be tracked for each employer or client employer. Oregon state exceptions to Rule 3-D of the National Council of Compensation Insurance (NCCI’s) Basic Manual for Workers' Compensation and Employer's Liability Insurance provide guidance for policy issuance, premium determination, and reporting requirements for worker leasing companies. ORS 656.850 requires PEOs that provide workers to a client (“Client”) satisfy the requirements of ORS 656.017 (provide assurance it will perform all duties and pay obligations required by Oregon workers’ compensation law) and ORS 656.407 (establish proof of coverage) for those workers and any subject workers employed by the Client unless the Client obtains its own Oregon workers’ compensation policy.

If the PEO provides workers for Clients and also provides workers’ compensation coverage for the Clients’ workers:
The premium charged to the PEO for each Client’s exposure must be based on each Client’s own experience rating modification or merit rating factor, if any.
The insurer provides coverage for the PEO’s direct nonleased personnel, workers leased to the Client, and the Client’s subject workers. The insurer must report the following to NCCI for the PEO and each PEO Client:
     ° Separate policy data, and
     ° Separate unit statistical experience

When a single master policy is issued to the PEO, the insurer must report separate policy and unit statistical data for each PEO Client. These separate Client policies are generated just for policy and unit statistical reporting and are not issued to the Client.

Under this type of policy arrangement, the PEO also develops its own experience or merit rating factor for its own direct nonleased personnel.

If the client secures its own workers’ compensation policy:
The policy must cover the client’s subject workers as well as any workers leased by the client.
This is a stand-alone policy underwritten like any similar workers’ compensation policy.
The insurer must report the following to NCCI:
     ° Separate policy data, and
     ° Separate statistical experience

Under this type of policy arrangement, the PEO must have its own policy for its direct nonleased personnel with its own experience or merit rating factor.

Data Reporting Requirements
When reporting policy data to NCCI, Employee Leasing Policy Type Code 6 (Client Company Policy For NonLeased Workers of Client Company) is not applicable in Oregon. Effective September 1, 2011, WCD will reject this Policy Type Code. If an Employee Leasing Policy Type Code 6 is reported, it will be rejected with the error combination of Employee Leasing Policy Indicator/Not Statutorily Valid.

Attachment A - Oregon Worker Leasing Company (PEO) Policy Rules and Requirements – contains additional information for the policy type indicators and descriptions of each, along with name reporting requirements.

PEO Proof-of-Coverage Filing Requirements
PEOs must file separate hard copy notices with WCD when their Clients have arranged for workers’ compensation coverage through the PEO. These notices are called "Worker Leasing Notices." The separate Client policy information reported to NCCI does not eliminate the PEO reporting of Worker Leasing Notices as required by Oregon law.

Refer to Attachment A - Oregon Worker Leasing Company (PEO) Policy Rules and Requirements - for the policy type indicators and descriptions of each, along with name reporting requirements.

PEO License Requirements and Worker Leasing Notices
Under ORS 656.850, PEOs must be licensed with Oregon. Visit WCD’s Worker Leasing Program website: http://www.cbs.state.or.us/wcd/compliance/for_worker_leasing.html

The PEO must be licensed before providing workers on a leased basis and must file separate notices with the State of Oregon’s Department of Consumer and Business Services, Workers’ Compensation Division when their clients have arranged for workers’ compensation coverage through the PEO, (see ORS 656.850(5) and OAR 436-050-0400). These notices are called "Worker Leasing Notices." The separate Client Policy information reported to NCCI does not release the PEO of its obligation to issue and cancel a worker leasing notice as required by Oregon law and according to the PEO arrangement. Policies filed using Employee Leasing Policy Type Code 4 or 5 require the PEO to make the separate Worker Leasing Notice filings with Oregon’s Department of Consumer and Business Services, Workers’ Compensation Division.

Please review Attachment A - Oregon Worker Leasing Company (PEO) Policy Rules and Requirements – for the policy type indicators and a description of each, along with name reporting requirements.


If you have questions about this webpage, please contact Alice Barghini, 503-947-7544.