HELPING YOU MAKE THE RIGHT DECISION
PEO Brokers
PEOs are great for some companies and horrible for others. We play both sides of the fence to help you find the right situation for your business.
ARE THEY RIGHT FOR YOUR BUSINESS?
What Are PEOs?
A Professional Employer Organization (PEO) offers small to medium-sized businesses a complete suite of HR services, including payroll processing, employee benefits administration, HR compliance, and workers' compensation. By partnering with a PEO, a business enters into a co-employment arrangement using the PEO’s tax ID, where the PEO acts as the “employer of record” for tax and administrative responsibilities. Meanwhile, the client company retains control over its daily operations and workforce management, while the PEO takes care of critical HR functions.
In a PEO setup, all employees from client companies are combined into a larger group for benefits, such as health insurance. This larger pool enables the PEO to negotiate more competitive rates and provide access to benefit options that might be otherwise unavailable to smaller businesses.
PEOs -- GOOD FOR SOME, BAD FOR OTHERS
We Are PEO Brokers
We are PEO brokers with access to over 100 PEOs, providing a wide range of options to suit different business needs. We understand that PEOs can be an excellent choice for some companies, offering a simplified, all-in-one solution for payroll, employee benefits, HR administration, and workers' compensation. However, they can also be a poor fit for other organizations due to potentially higher costs and reduced control over certain business functions.
That’s why we play both sides of the fence—our goal is to help you navigate the landscape and find the best solution tailored to your needs. If partnering with a PEO is the right path, we have an extensive network to ensure you find the ideal match. But if a decoupled approach would save you money while still providing a comprehensive and easy-to-manage solution, we’ll present that option too, helping you achieve the perfect balance between cost savings and service quality.
KNOW THE BEST OPTION FOR YOUR COMPANY
Understanding Your Group Risk
It is crucial to understand your group’s risk profile—whether classified as standard, unhealthy, or healthy—according to medical underwriting. Your group risk rating significantly impacts the types of coverage and rates available to your company when providing benefits for your employees. For example, an unhealthy group might face higher premiums, while a healthy group could qualify for lower rates. By having a clear understanding of where your group falls, you can make more informed decisions about your benefits strategy. This insight is particularly important when considering whether a PEO might be a good fit for your company, as it helps determine if joining a larger risk pool would stabilize costs or if it’s more cost-effective to pursue options outside of a PEO arrangement.
Most companies attached to a PEO will fall under the Standard Rating… meaning that they embody a balanced risk profile and fit the normal risk range for a carrier to insure.
A subset of the organizations will be labeled as ”Unhealthy”… meaning they pose a higher risk to the insurance company and ultimately more costly to support. These businesses take advantage of the PEO system, benefiting from the larger risk pool that effectively normalizes their rates. In other terms, PEOs can be great for unhealthy groups.
If your company is healthy,
PEOs LOVE you because you help regulate the rest of the risk pool… meaning without you, PEOs couldn’t survive.
In simple terms, your business is being dragged down by everyone else and you are paying higher rates to subsidize the greater PEO ecosystem.
REGARDLESS OF GROUP HEALTH
1 Community Rating
In a PEO environment, the health status of your individual group doesn't matter because everyone is combined into a larger risk pool for health insurance. This means that each group, no matter its specific health risks or claims history, receives the same community rating.
By spreading the risk across a larger pool of employees from various businesses, the PEO can secure more stable and often more competitive rates, reducing the impact of any one group's claims on the overall cost of coverage. This approach can result in more predictable premiums and improved access to quality health benefits for all participating businesses.
This is great for unhealthy groups... and terrible for groups tagged as healthy.
SOMETIMES IT'S THE WRONG SITUATION
When To Avoid A PEO
PEOs aren't the right fit for every company, as they can come with higher costs for payroll, HR services, and medical insurance -- particularly for healthier groups. In many cases, you will pay more for bundled services that could be more cost-effective if sourced separately. Additionally, using a PEO can mean losing some control over employee benefits and HR processes, which could be better tailored to your needs outside of a PEO enviornment.
SOMETIMES IT'S THE RIGHT SITUATION
When To Choose A PEO
A PEO can be an excellent choice for certain companies, offering significant advantages in the right scenario. For businesses that may be classified as a higher-risk group for insurance, joining a PEO's larger risk pool can help stabilize rates and reduce costs. Additionally, organizations looking for a seamless, all-in-one solution for benefits, payroll, and HR can greatly benefit from a PEO's bundled services. PEOs also offer added protections and conveniences by leveraging their tax ID, making complex processes simpler. In these situations, partnering with a PEO can be a strategic move, providing comprehensive support and valuable efficiencies for growing businesses.
GOOD FOR SOME
PEO Bundle
A PEO is a great option for a company that has the budget for bundled HR services, as it offers expert support in areas such as payroll, employee benefits, compliance, and risk management.
GOOD FOR OTHERS
Non-PEO Solution
A PEO can be difficult to justify for many companies, especially when they can replicate a similar solution by assembling the necessary components themselves for about 15-25% of the cost.
