Get Pay As You Go Workers
PEO Master Policies
versus Client Policies
Back in the early 90's most PEOs had master insurance polices
for workers compensation and health. The PEO industry was
booming. PEOs were able to establish master workers
compensation with most carriers at a reduced rate and then
marked up their rates to their customers. The same could
be said for health insurance.
Eventually many insurance carriers lost money on the arrangement
due to excessive claims and losses, class code misclassification
and premium fraud. Subsequently many carries pulled out of
the PEO market or created more stringent underwriting
PEOs who were unable to get renewed began carving out workers
compensation and/or health insurance in response to these
changes. It is currently more common for PEO to have a
master workers compensation policy than a master health
insurance policy. But many PEOs now operate as ASOs or
Administrative Services Outsourcing and carve out both workers
compensation and health insurance.
PEO master workers compensation policies are a great tool for
reducing insurance costs for client who have had some losses and
may have an NCCI experience rating greater than 1.00 because a
master policy allows a PEO to pay premium on the PEOs rates and
experience modifier instead of the clients rates and experience
Client owned policies or carve out polices may be a better tool
for employer who have developed a credit modifier lower than
1.00 due to low claims frequencies and loss ratios.
Once an employer has been with a PEO for a period of time they
will effectively loose their current modifier and it will reset
to the base modifier of 1.00 which means they pay premium based
on the carriers filed rates with not application of credits or
debits. This can be unfortunate for clients with good
claims histories if they ever decide to separate from their PEO
and process payroll in house or with a payroll service bureau.
Pay As You Go Insurance
Many carriers now provide access to programs known as Pay As You
Go workers compensation for PEOs and payroll companies.
These programs allow for client owned policies to feel more like
master policies in that they are managed by the PEO or payroll
company and premium is reported in real time and documented by
the payroll processing cycle. The benefit of these
programs include lower downpayment requirements and better
protection from audit bills caused by underestimated premium via
standard installment plans.
PEO Shop helps our customers evaluate PEOs, payroll programs,
pay as you go options, and standard insurance solutions so that
the best decision can be reached on a case by case basis.
Our agency also helps PEOs and payroll companies access markets
for workers compensation programs such as captives, carve out,
pay as you go, and more.