All Roll Calls
Yes: 87 • No: 1
NebraskaLB293A109th Legislature 1st and 2nd SessionslegislatureWALLET
Appropriation Bill
Sponsored By: Beau Ballard
Signed by Governor
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Bill Overview
Analyzed Economic Effects
6 provisions identified: 1 benefits, 1 costs, 4 mixed.
PEO tax and fee rules for businesses
For sales tax, covered employees count as the client’s employees, and the client keeps sales tax duties. Per‑employee assessments go to the client for covered employees and to the PEO for non‑covered employees; benefits a PEO provides to covered employees count toward the client’s mandate. For payroll‑based taxes, a PEO can use any small‑business allowance the client qualifies for. For gross‑receipts taxes or fees on PEO services, businesses can deduct the part of PEO fees that is pass‑through payroll costs like wages, benefits, workers’ comp, payroll taxes, withholding, and similar assessments.
Easier group coverage through PEO plans
For small‑employer insurance rules, a PEO is treated as the employer of its covered employees. When a client joins a plan sponsored by a single PEO, insurers must accept eligible employees and their beneficiaries. Both the client and the PEO count as employers for sponsoring retirement and other welfare plans. A fully insured single‑PEO welfare plan is treated as one employer plan, not a MEWA, and does not need MEWA registration.
Minimum coverage needed for co-employment
A co‑employment deal is allowed only if at least half of the client’s Nebraska employees are covered or at least half of the Nebraska payroll is for covered employees. Deals that meet neither test are prohibited.
Stronger safeguards for PEO health plans
Any PEO health plan must be fully insured or meet strict self‑funded rules. Self‑funded plans must use a Nebraska‑licensed administrator, hold assets in a trust consistent with ERISA section 403 as of January 1, 2025, keep actuarially sound reserves, notify workers if the plan is not fully insured, and file quarterly reports plus an annual report within 90 days of the plan year end. Reports must show proof of stop‑loss insurance that covers claims over 125% of expected claims and name the PEO as an insured. The department can hold a hearing after 30 days’ notice, order fixes within 30 days, and revoke a PEO’s registration if the PEO does not comply. PEOs cannot offer noncompliant plans.
Clearer PEO roles for businesses and workers
The law keeps the client in charge of running the business and training staff, unless the contract says otherwise. The contract must say that the PEO pays wages and handles payroll tax withholding and filings. “Wages” mean regular pay; bonuses, commissions, severance, profit sharing, deferred pay, and PTO only count if the PEO agrees in writing. Both the client and the PEO can hire, discipline, and fire covered employees. The client stays responsible for product and service quality and is not liable for PEO actions under the PEO’s control, unless the contract changes that. The PEO must give each covered employee a written notice, and the client must post notices about the co‑employment, unemployment benefits, and the minimum wage.
Workers’ comp rules in PEO deals
The agreement must name who gets workers’ compensation coverage. If a PEO agrees to get coverage but fails, the client still remains liable under Nebraska’s workers’ compensation law. When a PEO buys workers’ comp from an authorized insurer, the PEO is not treated as the insurer, even if it charges the client a different amount.
Sponsors & Cosponsors
Sponsor
Beau Ballard
legislature
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
legislature vote • 5/30/2025
Final Reading
Yes: 47 • No: 1
legislature vote • 3/11/2025
Vote
Yes: 40 • No: 0 • Other: 9
Actions Timeline
Approved by Governor on June 4, 2025
6/6/2025legislaturePassed on Final Reading 47-1*-1
5/30/2025legislaturePresident/Speaker signed
5/30/2025legislaturePresented to Governor on May 30, 2025
5/30/2025legislaturePlaced on Final Reading
3/25/2025legislatureAdvanced to Enrollment and Review for Engrossment
3/18/2025legislaturePlaced on Select File
3/14/2025legislatureAdvanced to Enrollment and Review Initial
3/11/2025legislatureDate of introduction
3/6/2025legislaturePlaced on General File
3/6/2025legislature
Bill Text
Introduced
6/6/2025
Enrolled / Slip Law
Final / Enacted