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Monday
Jul082013

PEO Broker Blog Stirs Lively Linkedin Discussion

 

PEOs, The PPACA and Health Care Reform Debated

Our previous blog post on Healthcare Reform and Professional Employer Organizatiions started a lively discussion after we distributed the article to various LinkedIn discussion groups. More than 30 individuals added their comments in the Healthcare Exchange Linkedn discussion group The subject attracted a wide range of opinions from a diverse group of health insurance brokers, HR professionals, and small business owners.

Whose Employees Are They?

Aaron Hoffman Vice President, RSS Insurance Services in Denver, Colorado asked • Bruce- I have a question for you as a PEO. Are the FTE calculations based on the employees reported under the PEO’s UITR or the employees managed by the specific worksite employer?

Jeffrey Buchanan a broker with West Callaway Stotka, Inc. in Pleasant Hill, California agreed • Great question—sort of a double edge sword. If the employees are common law employees of the employer (the business) then the FTE count lies with the business. If the PEO is the common law employer, I believe the PEO has the FTE count to deal with. So if it’s the business whi is the common law employer and the business has 45 FTE’s the business can avoid the shared responsibility payment. If the PEO is held to be the common law employer (must offer coverage), the PEO will have to have a plan in place. Will they, the PEO mandate the business pay for coverage? Small employer may be better off not in the PEO? I really don’t know? The regs are vauge. Any thoughts?

Eric Kane Account Executive at Cool Insuring Agency Inc. in Albany, New York  added • The proposed regulations do not address how the pay or play provisions apply to PEOs. The general rule is that leased employees are not considered employees of the service recipent for purposes of ACA”s pay or play provisions, it is still unclear as to how this applies to PEOs. There is some indication that the pay or play provisions will attach at the client level, thus making the client company the “employer” for this purpose. However, until guidance is issued on the pay or play rules with respect to PEOs, these organizations should use the common law standard to determine whether an employement relationship exists.

Margie Brownlee, RHU, REBC  Account Mgr at OMS Staff Solutions, LLC in Lakeland, Florida followed up • Hi Eric, I am looking at Federal Register Vol 78 page 221 “As noted in Notice 2011-36, section 414(n), which treats leased employees (as defined in section 414(n)(2) as employees of the service recipient for various purposes, does not cross-reference section 4980H (and is not cross-referenced by section 4980H) and accordingly does not apply for section4980H purposes. I am taking this to mean that leased employees are not tied to Section 4980H. The employment relationship may apply to some aspects but not to 4980H. Guess we will have to wait for further clarification as it involves PEOs.

Our Response  @Eric @Margie @Jeff - Great points, and I agree with your observations and interpretations. My understanding is that credit will be applied at the client level. The standard is whoever exercises “care and control” of the “recipient” worksite co-employer.

The IRS is aware of the PEO reporting issue and the need for clarity. They are in the process of implementing guidelines, updating forms, and will be focusing on compliance, not only for the purpose of applying Small Business Health Insurance Credits but for reporting and collecting unemployment taxes as well.
 

http://www.treasury.gov/tigta/auditreports/2011reports/201140103fr.html

PEO Master Group Medical Plans

Armand Smith, CIC Insurance and Employee Benefits Broker Chicago, Illinois stated • I have worked for a couple of PEOs and both of them their plans rates blew up because eventually the claims were more than they could handle and the good groups moved on.

Michael Schunk, CEBS President of Employee Benfits Advisors, LLC in Fort Lauderdale, Florida agreed • Armand, good point. - I’ve seen PEOs place groups in a preferred rating tier simply to write the business. Then at renewal the group gets a huge rate hike. Bottom line is the People with integrity will do the right thing, regardless of whether they are an insurance agent or a PEO salesman.

Our Response • @Michael @ Armand @Dave- You seem shocked that some PEOs and PEO clients may have experienced higher claims than expected. That is what happens when underwriting small group health insurance. Are you telling us that carriers never “lowball” rates to gain market share, then increase rates 40% or 50% at renewal? PEOs to not operate in a vacuum. The are subject to the same market conditions as the carriers, who for the most part, dictate underwriting guidelines and pricing to the PEOs.

Our job, as consultants is knowing which markets can provide our clients with the most favorable rates based on census, underwriting, and your client’s plan preferences.

Gary Whiddon Principal at Digital Benefit Advisors, Los angeles, California wanted to know • Do PEO’s have to adhere to the 85% MedicAl Loss Ratio while small groups insurers require only a 80%?

Our Response @Gary - PEOs are not insurance companies. Less than 10% of the over 700 PEOs operating in the US offer a “master group health insurance policy”. Most of these health plans are available from the larger national and regional PEO’s. They are usually fully insured plans from carries like Aetna, Humana, and the Blues. The larger PEOs work with brokers like Aon and Marsh. Most smaller PEOs provide coverage written in the standard markets using either an in-house agency or a broker relationship.

http://news.regence.com/article_display.cfm?article_id=4755

It is the carriers who must satisfy the MLR rules, not the PEO.

The PEOs handle all of the enrollment, on-boarding, benefits administration, and client support services internally or through established 3rd party relationships. Plan designs, markets, networks, pricing, choice, quality and level of service will vary by PEO.

We wish to thank everyone for their participation in the Linkedin discussion  group. We welcome your questions, comments and contributions. Please submit any questions and comments you may have about The Patient Protection and Afforadable Care Act or Obamacare and how a professional employer organization can help you. We will attempt to address and clarify any issues or concerns you have about co-employment administration, employee leasing, HR outsourcing and professional employer organizations.

 

 

Sunday
Jan172010

Linked Up With Erik Vonk

Using The Power of Linkedin to Connect

Question: What does a blog written to educate small business owners about employee leasing, human resource services and PEOs have to do with the social networking website Linkedin?

Answer  : Nothing … , and everything. 

The Reach of the Linkedin Network 

Linkedin.com is the popular social networking site which claims to have of over 50 million users worldwide, and is visited daily by millions of members who network by posting comments and “connecting” with people across the globe.

Members establish a profile page which includes a short bio of your education, background, and work history. An online resume. The site allows registered users to maintain a list of contact details of people they know and trust in business. Users can invite anyone to become a connection.

Linkedin can be used in several different ways:

  • To build a network of connections. Members can gain an introduction through a group or a mutual trusted contact.
  • To find jobs, people or business opportunities in one’s contact network.
  • Employers and Recruiters can list jobs and search for potential candidates.
  • Job seekers can review hiring manager profiles and research potential employers.
  • To market products and services to diverse groups.

Erik Vonk’s Intriguing New Venture

One morning, I came across the profile of Erik Vonk, the former CEO of Gevity HR. I noticed that Erik had started a new company called BOTH USA, LLC. He and his partners were launching an innovative new service for freelancers and solo practitioners called Back of the House. An exciting new platform for the solopreneur looking for a Fortune 500 solutions partner. It sounded very interesting, however, our focus is helping business owners with 5 to 500 employees. Why should I care about a service for independent contractors? After all, most of our clients have 50 employees and more. Why indeed?

Erik is one of the most accomplished and successful executives in the HR industry today. From  1992 - 2001, he built the North American division of Randstad Holdings, a Dutch staffing company.  Under his leadership, in 6 years, revenue grew from 0 - $1.5 billion dollars, creating a division that became larger and more profitable than it’s parent.

In 2002, Erik took over the helm of Gevity HR (formerly called Staffing Leasing), the nations largest professional employer organization at the time. He had boarded a ship that was taking on water and sinking fast. Erik quickly fashioned a capable crew who turned the ship around, and in 2006, Gevity HR earned the distinction of being named to the Business Week” List of 500 Top Growth Companies”. During his tenure at Gevity, Erik steered the company out of rocky waters into calmer seas.

He bid the company farewell in 2007, but like most restless entrepreneurs, Erik and his partners A. D. Frazier and Joey Reiman are at it again. This time, they are launching a new venture with the intriguing name of “BOTH” - Back of the House.

Nothing _ _  _ _ _ _, and Everything _ _  _ _ _ _

What are the odds of my starting a dialogue with Erik Vonk, captain of the HR industry, entrepreneur, and widely respected corporate advisor? On Sunday morning, January 3rd, 2010, I decided to send Erik an invitation to “Link up”. I had extended him New Years wishes, and asked if BOTH was similar to oDesk, another visionary platform for freelance artists, developers, and writers. To my surprise, not only had Erik accepted my invitation, but he responded back with a brief description of Back of the House, and the time saving benefits for professionals who operate their business on their own.

My reply was “It sounds like a one person PEO on steroids”. Something I “said” must have hit a cord, because before I knew it Erik was on the phone. Being a man of action, what else would you expect? Over the course of the following week, we made arrangements to meet and discuss his exciting new venture. I can’t say for certain what the future will bring, but my advice to you is this.

If your trying to find a job, seeking new opportunities, or trying to make a connection. Use Linkedin to reach out.

You have nothing to lose, …. and everything to gain.

Sunday
Sep202009

Fighting Workers Compensation Fraud? Facebook and Linkedin to the Rescue.

Roberto Ceniceros, senior editor and Western bureau chief for Business Insurance wrote an amusing inciteful article on the never ending battle against fradulent workers compensation claims.

His article, entitled “Comp Cheats Confess All on Social Networking Sites” published in Workforce Management provides us with a rare glimpse into the world of professional workers compensation claims investigators. It reveals the latest techniques these unsung heroes use to catch cheats who try to game the Workers Compensation system hoping for an all expense paid vacation or better yet, …. early retirement.

Stupid Is …… As Stupid Does

Forrest Gump, 1994

Workers compensation claims investigators are increasingly scouring popular social networking Web sites such as Facebook, MySpace and Linkedin to help insurers and employers fend off bogus claims.

Some claimants supposedly too disabled to work sometimes post the locations and dates for their upcoming sports competitions or rock band performances, or boast of new businesses they have launched and include date-stamped photographs of their physical activity. Others have openly bragged about fooling their employers with “Monday morning” workers’ compensation claims for injuries that occurred the weekend prior and away from the workplace. These stories told by private investigators reveal just how brazen and brainless some workers compensation cheats are.

Social networking sites have become increasingly productive investigation tools because they are being used more by older audiences. Personal, self-incriminating data that claimants load on social media sites has increased the efficiency of investigations and video surveillance, which have been used for years to secretly record disability claimants engaged in physical activities.“The 30- and 40-somethings have taken it over and have caused the explosion” in social media use, says Pierre Khoury, a special investigator for Harleysville Group Inc., a Harleysville, Pennsylvania-based insurer, and a member of the Baltimore-based International Association of Special Investigation Units. “It’s the new video camera,”  he says of the social networking sites. “Now we have a new kind of video camera, but we are not actually the ones filming. They are filming it for us.”

By eliminating time spent searching for claimants and waiting for them to engage in behavior that contradicts their claim, says Howard Schneider, president of Schneider Associates, a private investigative agency in Thousand Oaks, California. Social networking sites increase the efficiency of video recording and reduce investigation costs. Investigators who lack a photograph or address might find a picture and address on MySpace, Facebook or other sites such as Twitter or Classmates.com. In one recent case, traditional surveillance of a warehouse worker who filed a claim for a back injury proved fruitless. So investigators found the claimant’s Facebook site where they learned about his participation in bowling tournaments and the bowling alley he frequented.

     “It just amazes us how much information people provide,”

Howard Schneider, Schneider Associates

An investigator visiting the bowling alley found a large banner congratulating the claimant for rolling a perfect game and the date he rolled the game. “Which was after the date that he filed the claim,” Schneider says. The investigator video recorded the banner for evidence and later video recorded the claimant competing in a tournament. To do so, the investigator mixed among spectators video recording their friends and family participating in the tournament.

     “It was the easiest surveillance we ever had to do,”

There have been several cases of claimants who play in rock bands in their spare time. The workers list their engagement dates and then provide audiences with videso of particularly physical concert performances. Most of the evidence they collect is used to reject claims rather than to prosecute for fraud, reported several sources. Yet some cases are referred for prosecution. Alternative Service Concepts, a Nashville, Tennessee-based third-party administrator, for example, recently referred a case to Florida prosecutors in which a claimant’s Facebook posting tipped Global Options investigators to his business of selling jerky at flea markets, compromising his workers’ comp claim.

Don’t do the crime …. if you can’t do the time.

Detective Tony Baretta, 1975