April 6, 2021
Blog According to research, millions of small businesses spend over $27 billion annually by having untrained staff handle the HR department. Additionally, employee benefits are arguably one of the highest costs for businesses incur. Take health insurance, for instance, which at some point, every business must carry for its employees.
Choosing the best health insurance policy for your employees, one that will cover you right now and in the future can be complex and time incentive. This leaves you with the two best options.
To collaborate with a PEO management service and get PEO insurance, or choose an insurance agent. Both options will technically get you to the end goal, but they work quite differently.
Brokers Vs PEOs
A health insurance broker will simply help you get the insurance policy that suits your business. Most agents work with large numbers of insurance companies.
They have massive networks, which means they could get you the best benefits, for the most competitive rates. They do all the heavy research work.
Given that they have enough knowledge and expertise, they will help you make the right decision. Some brokers may go the extra mile and offer you long-term support, strategic help, and risk evaluation.
A professional employer organization or PEO, on the other hand, will give you an entirely different arrangement. A PEO will be a co-employer and offer you more benefits than just PEO insurance.
They will take over all HR management duties and deal with issues that have to do with your employees. They will handle things like insurance, workers’ compensation, payroll, and taxes, which can save you tons of money.
Benefits of Working With a Broker
One of the most significant benefits of working with a health insurance broker is that they will shop the market every year to find you the best insurance plans for your business. The difference between a broker and a PEO when it comes to this is that a PEO will only offer you the insurance options of the companies they partner with.
They will not go beyond those partnerships to get you the best plan in the market. The broker, however, has no partnership with these insurance companies and will get you the ideal insurance policy in the market.
Additionally, while most PEO companies work and provide support online. Working with a broker is quite different. They will give you a designated account representative that will answer all your questions in person.
A Broker Will Educate Your Employees
Most professional health insurance brokers in the market offer enrollment meetings. These meetings are designed to educate employees due to the fact most of them don’t understand what’s involved. Lack of education on health care options usually lowers the utilization of benefits for most companies.
As an employer, you spend millions of dollars to make the benefits available for your employees. It’s imperative for you to make sure that they’re utilizing all of them to the maximum.
A health insurance broker will save you money that you would otherwise pay on premiums. For instance, they could teach your employees to go to quick care facilities instead of having to go to the ER. This will help them take advantage of all the benefits offered into the health plans, such as mental health services and your physical exams.
Most employers assume that their employees understand these benefits, but you may find that a majority of them don’t. Teaching your employees will work in favor of your company. Their appreciation for you will increase, and they will take better care of your business.
They Will Help You Keep up With Compliance
Understanding the rules and regulations that apply to your business is increasingly important. The thing about rules and regulations, though, is that they change constantly.
It may be hard for you as an employer to keep track of everything being enforced. You may have avoided compliance before because you had no time to go through all the legal documents to understand what the current rules stipulate.
This can be a significantly expensive mistake. Non-compliance can cost your company thousands of dollars. A health insurance broker will help you with this issue. The next best thing about brokers is that they will work with you around your schedule.
Benefits of Getting PEO Insurance
Most professional employer organizations charge a percentage of the employees gross payroll for their services. But you must understand that partnering with a PEO service means getting into a co-employment relationship. This means that the PEO will take care of hiring the employees, and managing everything to do with them.
This kind of relationship is ideal for smaller businesses that need to use the benefits that come with a large organization. Having more employees will mean that you’ll pay less benefits in terms of retirement plans and workers’ compensation, but most especially for PEO insurance.
However you need to understand that once you get into a relationship with this company, they will have a right to control and direct employees in regards to certain matters. For instance, when your employees complete their tax returns, it’s not your business name that will appear on the forms, but that of the PEO company.
Also, there may be lack of transparency because the benefits will be banded together. Even though PEO insurance may seem like a cheaper option, it’s imperative for you to consider everything you’ll get and how it affects your business.
Working With Brokers vs PEOs
Now that you understand what both PEOs and brokers have to offer, you’re in a better position to consider whether PEO insurance would be a better option. Both PEOs and brokers will get you a health insurance policy. However, your choice will determine the kind of policy you end up with, and the benefits your employees get to enjoy.
Beyond that, if you want to find the best PEO and workers’ compensation solution, please get in touch today. We’ll set you up with the best possible option for your business.
