1. 1. The responsibility to obtain workers' compensation coverage for covered employees in compliance with all applicable laws shall be specifically allocated in the professional employer agreement to either the client or the PEO.

2. 2.

   1. (1) Coverage for both the directly employed workers of a client and the covered employees of that client shall be all in the residual or all in the voluntary market with the same carrier.

   2. (2) Workers' compensation coverage for covered employees in the voluntary market may be obtained by either:

      1. (a) The client through a standard workers' compensation policy or through duly authorized self-insurance under section 287.280; or

      2. (b) The PEO through duly authorized self-insurance under section 287.280, through the type of policy referenced under the provisions of 20 CSR 500-6.800(5)(c)2 issued to the PEO by a carrier authorized to do business in this state, or through a multiple coordinated workers' compensation policy issued by a carrier authorized to do business in this state in the name of the PEO or the client.

         ­­­A PEO authorized to self-insure under section 287.280 shall report to the insurer or the appropriate state and rating authorities such client-based information as is necessary to maintain the client's experience rating.

   3. (3) Workers' compensation for covered employees in the residual market may be obtained by the client through a residual market policy or by the PEO through a multiple coordinated policy in either the name of the PEO or the client that provides to the appropriate state and rating authorities the client-based information satisfactory to maintain the client's experience rating.

3. 3. A PEO that applies for coverage or is covered through the voluntary market shall also maintain and furnish to the insurer sufficient information to permit the calculation of an experience modification factor for each client upon termination of the coemployment relationship. Information reported during the term of the coemployment relationship which is used to calculate an experience modification factor for a client prior to and upon termination of the professional employer agreement shall continue to be used in the future experience ratings of the PEO. Such information shall include:

   1. (1) The client's corporate name;
   2. (2) The client's taxpayer or employer identification number;
   3. (3) Payroll summaries and class codes applicable to each client, and, if requested by the insurer, a listing of all covered employees associated with a given client; and
   4. (4) Claims information grouped by client, and any other information maintained by or readily available to the PEO that is necessary for the calculation of an experience modification factor for each client.
4. 4. In addition to any other provision of chapter 287, any material violations of this section by a PEO is grounds for cancellation or nonrenewal of the PEO's insurance policy by the insurer. If a PEO has received notice that its workers' compensation insurance policy will be cancelled or nonrenewed, the PEO shall notify by certified mail, within ten days after the receipt of the notice, all of the clients for which there is a coemployment relationship covered under the policy to be cancelled, provided that notice shall not be required if the PEO has obtained another insurance policy from a carrier authorized to do business in this state, with an effective date that is the same as the date of cancellation or nonrenewal.
5. 5. If the coemployment relationship with a client is terminated, the client shall utilize an experience modification factor which reflects its individual experience, including, if applicable, experience incurred for covered employees under the professional employer agreement. The PEO shall provide to the client the client's information that is maintained under subsection 3 of this section within five business days of receiving notice from the client or within five business days of providing notice to the client that the coemployment relationship will terminate. The PEO shall also provide such information to any future client insurer, if requested by such client. The PEO shall notify the insurer of its intent to terminate any client relationship prior to termination when feasible. When prior notice is not feasible, the PEO shall notify its insurer within five business days following actual termination.
6. 6. Both the client and the PEO shall be considered the employer for purposes of coverage under chapter 287. The protection of the exclusive remedy provision under section 287.120 shall apply to the PEO, the client, and to all covered employees and other employees of the client irrespective of which coemployer obtains such workers' compensation coverage. Nothing in this section shall be construed to exempt either the client or the PEO from compliance with the provisions of chapter 287.
7. 7. A client may request the information maintained under subsection 3 of this section at any time and every PEO shall provide that information to such client within five business days of receiving such a request.
8. 8. In the case of a request for information by a third party requesting verification of a client's experience modification factor for a client in the type of policy referenced under the provisions of 20 CSR 500-6.800(5)(c)2, the PEO shall, within five business days of receipt of receiving the client's consent, provide such third party with only the information maintained by the PEO under subsection 3 of this section. If a client refuses to grant consent to a request for information under this subsection, the PEO shall notify the requesting third party that the client has refused to consent to the disclosure of the information maintained by the PEO under subsection 3 of this section.
9. 9. A client shall provide any prospective insurer with the information maintained by the PEO under subsection 3 of this section upon receiving such information from the PEO. Failure to provide a future insurer with such information shall be considered a violation of subsection 6 of section 287.128.

10. 10.

    1. (1) A client shall notify any prospective insurer of the client's previous or current relationship with a PEO. Failure to provide a future insurer with such information shall be considered a violation of subsection 6 of section 287.128.
    2. (2) This subsection shall not apply if the PEO did not provide workers' compensation coverage to a client during the coemployment relationship.
11. 11. For purposes of chapter 288, a PEO registered under sections 285.700 to 285.750 shall be treated as a lesser employing unit under section 288.032.

(L. 2018 H.B. 1719)