38.2-1921.1 - Professional employer organization workers' compensation rating.
§ 38.2-1921.1. Professional employer organization workers' compensationrating.
A. Whenever any professional employer organization enters into an agreementwith a client company to provide professional employer services, theexperience rating of the professional employer organization shall be used forvoluntary market workers' compensation insurance premium computation purposeswith respect to such coemployees. In the event that the agreement between aclient company and a professional employer organization is terminated, thecoemployees shall become solely the employees of the former client company.If the coemployees have been covered as employees of the professionalemployer organization under a voluntary market workers' compensationinsurance policy for a period of three consecutive years or more, theworkers' compensation insurance premium applicable to the policy of theformer client company shall be based upon the rating of the professionalemployer organization until the former client employer has developedsufficient experience to be rated on its own or no longer qualifies forexperience rating. If the coemployees have been covered as employees of theprofessional employer organization for a period of less than threeconsecutive years, the workers' compensation insurance premium applicable tothe policy of the former client company shall be based upon the experience ofthe former client company which reflects its experience during the experienceperiod specified by the approved experience rating plan, including, ifavailable, experience incurred for coemployees under the professionalemployer services agreement.
B. Insurers may conduct periodic audits of any professional employerorganization, including payrolls, operations and records as related toindividual client company operations in order to ensure that the appropriatepremium is charged for workers' compensation insurance coverage. Such auditsmay include audits of the client company in order to verify payroll, lossesand classifications, and inspections of the premises where the coemployeeswork.
C. A professional employer organization may aggregate its coemployees under asingle employer plan for the purpose of providing employee benefits providedthat the professional employer organization meets the regulatory licensureand filing requirements promulgated by the Commission for fully insuredmultiple employer welfare arrangements. The following information required tobe filed shall be confidential and shall not be disclosed to the public: (i)all information related to the names and addresses of employers participatingin the plan and (ii) all information pertaining to the adequacy of the plan'slevel of reserves and contributions; however, nothing herein shall (i)prevent the Commission from using such information in any regulatoryproceeding or (ii) be interpreted to prohibit or limit the production ofdocuments containing such information from the professional employerorganization pursuant to an otherwise lawful subpoena issued by a court ofcompetent jurisdiction.
D. The Commission may promulgate regulations as it deems necessary for theadministration of this section.
(2000, cc. 624, 718.)