NAIC/IAIABC Joint (C) Working Group
December 2, 2007

The NAIC/IAIABC Joint (C) Working Group met on Sunday, Dec. 2, 2007.

During the meeting, the Working Group:

• Discussed the latest draft Independent Contractor White Paper. The draft is intended to be useful to states wanting to resolve workers’ compensation independent contractor concerns, especially those regarding classification (i.e. as an independent contractor or employee), by allowing clarification of these issues and providing recommendations. It was agreed that progress has been made on the draft, but more work is needed to address minimum premium and/or “if any” policies, the applicable recommendations, and completion of its two charts—Table 1 regarding state standards for determining independent contractor status and Table 2 regarding state methods of pre-certification. The draft notes that regulatory systems generally classify the status of an independent contactor using either a “bright line” approach (specific and binding set of criteria) or a “weight of evidence” approach (a number of criteria to be considered and balanced).

• Discussed clean bill criteria for medical bills to workers’ compensation payers. The Working Group continues to pursue this subject, of great interest to International Association of Industrial Boards & Commissions (IAIABC), pertaining to how best to develop uniform medical claims reporting protocols for medical bills. “Clean bill” is a major issue to medical providers so they can receive timely payment of bills. States want to know what is going on with workers’ compensation medical claims, since today nearly 60% of workers’ compensation claims are medical.

• Received an update from the Large Deductible Study Implementation (C) Working Group reporting progress on development the draft Third Party Administrator (TPA) Guidelines and Guidelines for the Filing of Workers’ Compensation Large Deductible Policies & Programs (Large Deductible Guidelines). One key area remaining to be resolved in drafting the TPA Guidelines involves how much oversight should be required regarding bank accounts held by TPAs for their carriers. Another area being examined is whether the reporting of claims denials by the TPA should be required, particularly when precipitated by a recommendation made from an employer for the denial. It is believed that both drafts are becoming mature and may be ready for consideration of adoption by the Working Group the first quarter of next year.  

• Received an update from the Professional Employer Organization Model Law (C) Working Group which reported that the Guidelines for Regulations and Legislation on Workers’ Compensation Coverage for Professional Employer Organization Arrangements (NAIC PEO Guidelines), adopted by the NAIC on June 4, 2007, are being considered for making a proposed change to Section 12.  Changes proposed to Section 12 would amend language to broaden its Subsection 12A and add a drafting note to that section. The change was adopted by the Property & Casualty Insurance (C) Committee on Nov. 14, 2007 and now awaits a decision by NAIC Executive/Plenary.

• Announced that the National Conference of Insurance Legislators (NCOIL) met on Oct. 27, 2007 and generally accepted suggested changes recommended by the NCOIL PEO Model Focus Group of the Workers’ Compensation (C) Task Force to the draft NCOIL “Model Act Regarding Workers’ Compensation Insurance Coverage in Professional Employer Organization Relationships” (draft NCOIL PEO Model Act). The NCOIL PEO Model Act was adopted by that organization on Nov. 17, 2007.

Action Items:

The next meeting of the NAIC/IAIABC Joint (C) Working Group will be held during the IAIABC All Committee Conference, April 6—12, 2008 in Austin, Texas. The exact time and date will later be announced.