State Insurance Commissioner Tom Gallagher issued a warning Wednesday to employers: stay away from Action Staffing Inc.
But an executive with the Colorado-based company proposing to buy a majority stake in Tampa-based Action Staffing said the company is taking steps to address its problems and has things well in control.
"I'm trying to comply, but it takes time," said Jim Dunn of American Pacific Industries Inc., the company proposing to buy 58 percent of Action Staffing and infuse the company with as much as $10-million. "If people can calm down, I'll take care of everything."
Dunn was sent to Tampa last week by American Pacific to manage the beleaguered company until the acquisition can be completed.
Action Staffing leases workers to employers and takes care of administrative matters such as payroll, personnel issues and employee benefits, including workers' compensation and health insurance. Action Staffing leases more than 11,000 employees in 35 states. Some 4,000 employees have health insurance through Action Staffing's self-insured fund, according to Dunn.
In a "consumer alert" announcement, Gallagher warned employers whose workers' health care benefits are provided by Action Staffing that the company's financial statement shows it to be insolvent. He urged employers contracted with Action Staffing to seek employee benefit coverage elsewhere because there is no guaranty fund to pay insurance claims if Action Staffing fails to do so.
But Dunn said the company has $10-million in reserves set aside to pay claims on its self-insurance fund. As ordered by the Insurance Department, Action Staffing will also escrow an anticipated $1-million federal tax return to cover possible shortfalls in coverage.
The U.S. Department of Labor earlier ordered Action Staffing to switch from a self-insured fund to an authorized insurance carrier. Dunn said Action Staffing has a contract with an insurance carrier "in place" and expects to have it signed "in the next day or two."