Pending Texas PEO legislation

Two bills related to PEOs have been introduced into the Texas legisalture.

SB 976 - Would change existing law to permit PEOs to sponsor self-funded group health plans. Under the current Tewas PEO licensing law self funded health plans are not permitted, unless permitted under ERISA. The current language is fairly murky, but is generally interpreted as effectively forbidding self funded plans. The U.S. Department of Labor has consistently held that PEO group health plans are MEWAs subject to state regulation. Texas has consistently interpreted this language as barring all self funded PEO plans.

SB 976 is thus a significant alteration in existing law.

HB 1939 - Would modify the rules related to giving notice to worksite employees regarding the requirement for reporting back to the PEO to seek reassignment. HB 1939 would define specific requirements for the disclosure to be made to the worksite employees.

What is not in HB 1939 is any indication that this statute would give PEOs any assurance that the TWC would actually apply the statute. Most PEOs have seen only inconsistent enforcement of the existing law by the TWC.