Massachusetts House Bill H1887

Massachusetts 2023-2024 Regular Session

• Introduced: 2/16/23
• Refer: 2/16/23
• Refer: 1/25/24

Caption

Relative to professional employer organizations

Impact

The proposed bill would create a more unified approach to how employee benefit plans are administered within the scope of PEOs. By conditionally classifying PEOs as employers, it would allow them to streamline the process of offering fully-insured welfare benefit plans. Moreover, it formalizes the inclusion of covered employees in the Full-Time Equivalents count for health insurance plan eligibility, directly impacting how businesses operate concerning employee benefits and insurance coverage.

Summary

House Bill 1887, presented by Representative Kenneth I. Gordon, aims to amend Chapter 149 of the Massachusetts General Laws regarding professional employer organizations (PEOs). The bill stipulates that both a client and a registered PEO or PEO group be recognized as employers for the purposes of sponsoring retirement and welfare benefit plans for their covered employees. This adjustment is significant as it directly affects how employers can manage and provide benefits to their employees in the state.

Contention

Potential points of contention surround the implications of altering the classification of employers under state law. Critics may raise concerns about the responsibilities and liabilities that could arise for PEOs and their clients. Additionally, the bill's language regarding the treatment of welfare benefit plans as single employer plans could lead to arguments about the adequacy of protections for employees and coverage provisions. Supporters argue it will enhance the flexibility and competitiveness of benefit offerings within the workforce.