Chances are if you are a small business owner, you will, or already have, come across the term PEO. If you are like many business owners it’s difficult making heads or tails about a PEO. Below are 16 things I want to help you understand about a PEO.
PEOs allow your company to focus on core competencies. This allows your company to focus on generating revenue and keep from having to spend valuable time and energy dealing with a lot of employee-related administrative tasks.
PEOs keep companies up-to-date with healthcare reform. They have experts that are hired to service your account in each area exclusively, so you can find out what’s happening in the world of healthcare reform as it relates to employers and employees and your company.
PEOs provide federal guidance and compliance information. The PEO is the employer of record, and keeps the client company up-to-date to help in the process of avoiding penalties and fines as well as staying compliant.
PEOs share in the liability of being an employer. For the services that are provided by the PEO, it is a shared liability.
PEOs provide subject matter expertise in many areas related to running your business. A PEO can help in the areas of HR, payroll, benefits, Workers Compensation, compliance/regulation, ala carte outsourcing services, ASOs, recruiting, time and attendance systems, bookkeeping services, risk and safety, and 401K.
PEOs offer integrated technology that manages the costs associated with your employees. This eliminates having the need for multiple vendors as well as redundant tracking and auditing. All the different departments are integrated into one system which improves the reporting capabilities.
PEOs can offer a bundled solution for all of your employee related needs. They eliminate the need for multiple vendors, providers, and systems, and help you gain efficiencies.
Your company can save money by participating in the PEO’s master workers’ compensation and benefit policy. This is through a pooled insurance program, which provides more choices and improves your cash flow with a pay-as-you-go program.
PEOs offer your employees many healthcare plans. PEOs can offer as many as 10 or more different insurance plans from which to choose. The great thing is the employees get the benefit of choosing which works best for their family.
White collar PEO providers offer clients a fortune 500 set of benefits. This type of PEO can help your company compete with larger public corporations, with benefit options for everything from health, dental, vision, life, long-term, and short-term, and even pet insurance, prepaid legal, and discounts on various products.
PEOs have many different billing methods. These can be confusing, so make sure you understand exactly what you are paying for. Billing costs can be bundled, bundled and averaged, transparent, have a per-check fee, or ala-carte.
Not all PEO value propositions are the same. Some offer strictly payroll and HR, and go to the open market for the insurance products, and may or may not tell you. Some have just one account representative that handles everything about your account, but do not have an expert for each field of expertise. It all depends on the size and structure of the PEO. Some are transaction based while there are others that bring additional services and resources.
Some PEOs don’t offer a master medical program and don’t tell you. This happens because the smaller PEOs are trying to compete with the larger ones. What this means for you is that you might miss out on the advantages of having a larger pool, but smaller PEOs do offer flexibility in being able to shop the open market.
Some PEOs only provide payroll and HR. These types of PEOs are more like an ASO model, basically administering your insurance, and giving you tools to manage multiple vendors, but not sharing in the liability.
Some PEOs have hidden costs. These costs could be on the employee side, the employer side, for reporting, products that are optional, or for exiting fees. It’s very important to understand what is and what is not included when you enter and when you exit the arrangement.
Some PEOs can offer portable benefits. These are predominantly for employees where they can take their disability, short-term, long-term, cancer policy, life insurance or employee-paid benefit with them to the next job. If it’s a non-PEO sponsored master medical policy, this is portable as well.
I hope this information is of value to you. We have just sent you an email with a copy of this information for your reference. If you have any questions feel free to contact Tammie McKenzie at 713-822-1508 or complete the form below: