| Oregon
law requires all employers with one or more subject workers to provide workers' compensation
insurance. The employer can obtain workers' compensation coverage: |
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Directly
through an insurer |
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By
becoming certified as a self-insured employer, or |
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By
obtaining coverage under a worker leasing arrangement |
In a worker leasing arrangement, a worker leasing company, also known as 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: |
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The
client's workers' compensation insurance policy, |
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The
self-insured employer, or |
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A
worker leasing company's workers' compensation insurance policy |
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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.
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| If
the PEO provides workers for Clients and also provides workers’ compensation coverage
for the Clients’ workers: |
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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. |
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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: |
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Separate policy data, and |
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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.
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| If
the client secures its own workers’ compensation policy: |
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The
policy must cover the client’s subject workers as well as any workers leased by the client. |
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This
is a stand-alone policy underwritten like any similar workers’ compensation policy. |
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The
insurer must report the following to NCCI: |
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°
Separate policy data, and |
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Separate statistical experience |
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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.
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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.
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