July 23, 2022
Blog One report shows that 15% of small and medium-sized businesses with fewer than 99 employees are using the services of PEOs with much success. The same report says that businesses who use a PEO have 40% better revenue growth. With this kind of success, it’s no wonder that more and more businesses are considering using a PEO.
But with so many options out there, how do you know which PEO is right for your business? And once you’ve found a PEO, what kind of insurance policies should you be looking for? In this guide, we’ll answer all of those questions and more.
We’ll start by explaining what a PEO is and how it can benefit your business. Then we’ll give you a rundown of the different types of insurance policies offered by PEOs. By the end of this guide, you’ll know everything you need to know about PEO insurance policies and how to choose the right one for your business.
What Is a PEO?
A professional employer organization, or PEO, is a company that provides HR outsourcing services to businesses. These services can include payroll, benefits, workers’ compensation, and compliance with employment laws.
PEOs are beneficial to businesses because they allow business owners to outsource the HR functions that they may not have the time or knowledge to handle. This can free up business owners to focus on more important tasks, like growing the business.
PEOs can also save businesses money. Because PEOs pool together the resources of many small and medium-sized businesses, they can negotiate better rates for things like health insurance and workers’ compensation.
What Do PEO Companies Do?
PEO companies provide a number of services to businesses, the most common of which we’ll discuss here. Firstly, a PEO can handle all of your payroll needs, from calculating wages to issuing paychecks. They can also handle tax compliance and filing.
A PEO can help you design and administer a benefits package for your employees. This can include health insurance, dental and vision insurance, life insurance, and more. They are much more aware of the complex and sometimes confusing insurance industry.
This means they’ll look at your needs and figure out the best type of insurance policy for you and your employees. They also handle all of the paperwork and claims processes for workers’ compensation insurance. If an employee is injured on the job, the PEO will handle everything from filing the claim to coordinating with doctors and therapists.
What Is the Benefit of a PEO?
There are many benefits of using a PEO. The three most common benefits are time savings, cost savings, and peace of mind.
Time Savings
As we mentioned before, one of the benefits of using a PEO is that it frees up business owners to focus on more important tasks. When you outsource your HR functions to a PEO, you don’t have to worry about things like payroll, benefits, or workers’ compensation. This can give you more time to focus on growing your business.
If you were to hire an in-house HR team to handle these functions, you would need to spend time training them and monitoring their work. With a PEO, you can be confident that your HR needs are being handled by experts.
Cost Savings
Another benefit of using a PEO is cost savings. Because PEOs pool together the resources of many small and medium-sized businesses, they can negotiate better rates for things like health insurance and workers’ compensation.
PEOs can also help you save money by preventing compliance issues. If your business is not in compliance with employment laws, you could be subject to high fines and penalties. By outsourcing your HR functions to a PEO, you can be confident that your business is in compliance with all relevant laws.
Access to Wider Options
When you work with a PEO, you have access to a wider range of benefits and insurance options than you would if you were to go it alone. This is because PEOs have the buying power to negotiate better rates with insurance companies.
PEOs can also offer additional services, like retirement plans and health savings accounts, that you may not be able to offer on your own.
Peace of Mind
Finally, using a PEO can give you peace of mind. When you outsource your HR functions to a PEO, you are confident that they are handled by experts. This gives you peace of mind knowing the handling of your payroll, benefits, and workers’ compensation are in good hands.
While you focus on your core business, you are confident that your employees are taken care of and that your business is in compliance with all relevant laws.
How Does a PEO Work?
A PEO works with businesses on a co-employment basis. This means that the PEO becomes the employer of record for your employees.
The PEO then contracts with your business to provide HR services. This arrangement has a number of benefits, including those we’ve mentioned like access to better insurance rates and compliance with employment laws.
How Do I Choose a PEO?
There are a few things you should consider when choosing a PEO. Firstly, you should make sure that the PEO is licensed and insured according to state and federal laws.
You should also ask about the PEO’s experience and track record. Make sure to get references from other businesses that have used the PEO’s services.
Finally, be sure to ask about the fees associated with using the PEO’s services. Fees can vary, so it’s important to get an idea of what you’ll be paying before you sign any contracts.
What Is the Difference Between a PEO and ASO?
A PEO is a professional employer organization. An ASO, or administrative services organization, is similar to a PEO but does not offer co-employment services.
ASOs provide HR services like payroll and benefits administration, but they do not become the employer of record for your employees.
ASOs offer a few services including:
- Payroll: ASOs can manage your payroll, including calculating taxes and issuing paychecks
- Benefits administration: ASOs can help you choose and administer employee benefits like health insurance and retirement plans
- Compliance: ASOs can help you stay compliant with employment laws
While ASOs can offer some benefits, they do not have the same buying power as PEOs. This means that they cannot offer the same cost savings on things like insurance rates.
Additionally, ASOs do not offer the same range of services as PEOs. For example, most ASOs will not be able to offer retirement plans or health savings accounts. If you are considering using an ASO, be sure to ask about their fees and services before you sign any contracts.
What Are the Differences Between the Services Offered by an HRO, ASO, and PEO?
An HRO is a human resource outsourcing company. HROs provide HR services like payroll and benefits administration, but they do not become the employer of record for your employees.
Some services offered by HROs include:
- Payroll processing
- Tax filing
- Benefits administration
- Recruiting
- Training
- Employee development
ASOs are similar to HROs, but they do not offer co-employment services. ASOs also have a narrower range of services than HROs. So the main difference between HROs and ASOs is that HROs have more experience and can offer a wider range of services.
PEOs are similar to HROs, but they also become the employer of record for your employees. This allows them to offer additional services like workers’ compensation and unemployment insurance.
PEOs will still have the best cost savings on things like insurance rates and can offer a wider range of services, like retirement plans and health savings accounts.
How PEOs Help Increase Revenue
There are a few ways that PEOs help increase revenue for your business. Firstly, PEOs can help you save money on things like insurance rates and employee benefits.
Additionally, PEOs can help you free up time by taking care of HR tasks like payroll and benefits administration. This frees up time for you to focus on revenue-generating activities.
Finally, PEOs can help you attract and retain talented employees. By offering things like competitive benefits packages and compliance with employment laws, PEOs can help you attract and retain the best employees.
What Is a PEO Insurance Policy?
A PEO insurance policy is an insurance policy that covers your business and your employees. PEOs offer a variety of insurance policies, including:
- Workers’ compensation insurance
- Unemployment insurance
- Liability insurance
- Property insurance
- Health insurance
- Dental insurance
- Vision insurance
Remember that PEOs have relationships with a number of different insurance carriers, allowing them to get the best rates on policies for their clients.
Can’t I Get These Myself?
While you could get these insurance policies yourself, it is much cheaper and easier to get them through a PEO. This is because PEOs have relationships with a number of different insurance carriers.
A PEO will be able to mix and match different policies from different carriers to get the best rates for their clients. Additionally, PEOs will handle the claims process for their clients. This means that you will not have to deal with insurance companies or file any paperwork.
This saves you from legal headaches and can help you save a significant amount of money.
Do I Need Worker’s Comp?
If you have employees, then you are required to have worker’s compensation insurance. Worker’s compensation insurance covers your employees if they are injured on the job.
If you do not have worker’s compensation insurance and an employee is injured on the job, they could sue you for their medical expenses.
All states require businesses to have some form of worker’s compensation insurance. So if you do not have worker’s compensation insurance, you are breaking the law.
PEOs can help you get worker’s compensation insurance at a lower cost than if you got it yourself.
What About a Stand-Alone Policy?
If you do not want to use a PEO, you could get a stand-alone policy. A stand-alone policy is an insurance policy that is not through a PEO.
A stand-alone policy can cover some of the same things as a PEO insurance policy. The main difference is that you will have to deal with the insurance company yourself. This means that you will have to file your own claims and do your own paperwork.
Additionally, stand-alone policies are usually more expensive than PEO insurance policies since you won’t have the same negotiating power as a PEO.
What Is the Best Way to Get PEO Insurance?
The best way to get PEO insurance is through a reputable PEO. There are a number of different PEOs available, so it is important to do your research before selecting one.
When looking for a PEO, you should consider things like their financial stability, size, and experience. You should also make sure that the PEO is licensed to operate in your state.
Once you have selected a PEO, you will need to enter into a contract with them. This contract will outline the services that the PEO will provide and the fees that they will charge.
The bottom line is that a PEO insurance policy can save you a significant amount of money and hassle. If you have employees, you should strongly consider getting a PEO insurance policy.
Take Advantage of PEO Services
PEOs can save you a significant amount of money and hassle. If you have employees, you should consider getting a PEO insurance policy to save yourself a significant amount of money and hassle.
National Workman’s Comp Solutions is a PEO that offers a variety of insurance policies, including workers’ compensation insurance, liability insurance, health insurance, and more. We have relationships with over 45 different insurance carriers to get the best rates for our clients.
Contact us today and we’ll tailor a policy to fit your needs and budget.
