PEO insurance

clock December 14, 2022

file Blog

What is a PEO Insurance Policy?

PEO services are becoming increasingly popular these days with PEOs in the United States servings over 173,000 companies and their 4 million employees. Not quite sure what these services are or what PEO companies offer?

That’s okay. If you’re like most business owners, there’s always something new to learn about running your company. And if workers’ compensation and health insurance are two of those things on your radar, but you’re still not sure what it is or where to start, then read on! 

In this comprehensive guide, we’ll explain everything you need to know about PEO insurance policies. This includes what they are and how they work. We’ll also discuss some of the benefits of contracting with a PEO company for insurance in general.

What Is a Professional Employer Organization?

Professional Employer Organizations (PEOs) are companies that provide integrated management services to businesses. They handle tasks such as:

  • Payroll processing
  • Employee benefits
  • Risk management
  • Human resource compliance

By using a PEO, your business can outsource essential business processes while still focusing on its overall strategy and mission. This approach gives you access to:

  • Economies of scale,
  • Improved HR compliance
  • Expertise in human resource matters
  • Lower employment costs

It also helps to reduce potential legal liabilities for employees and managers.

All in all, professional employer organizations provide valuable assistance to businesses of all sizes. However, they’re particularly helpful for service-based businesses. This includes contractors, healthcare businesses, and others where workers comp is important (we’ll talk about why that’s the case in just a bit!).

What Do PEO Companies Do?

We get this question a lot. You might understand what a PEO’s functions are. But what do they really do?

Simply put, PEO companies are experts at assessing human resources needs. They’re also pros at managing payroll tasks on behalf of their clients. This means that working with a PEO can help take the stress off you or your HR department. They do so by providing HR services such as:

  • Managing employee onboarding
  • Creating employee handbooks
  • Setting up benefit plans
  • Explaining federal and state labor compliance laws
  • Providing access to insurance policies

As part of the service, an experienced staff of professionals will assess your business needs. Then, they’ll provide advice for improving operations. In some cases, they might even help you train employees and draft new hire paperwork.

Each day, when working with a Professional Employer Organization, you can expect to work with knowledgeable support staff that is eager to guide you through any issue with your business’s human resource management.

What Is PEO Insurance?

Now, we’ve mentioned insurance a few times already. Just how do PEOs help you access health insurance and other types of insurance policies for your employees? These organizations have access to vendors.

Their special network allows them to offer comprehensive coverage for businesses of all sizes, from small businesses to large corporations. In most cases, PEO insurance policies offer protection for both employers and employees. These policies cover costs involved in the case of an accident, injury, or illness.

Likewise, the packages they offer typically include:

Remember when we said this was particularly beneficial for service-based businesses such as contractors or healthcare businesses? This is why! Workers comp is such a critical part of working with a PEO. Businesses that carry out activities in high-risk environments tend to need better workers’ compensation insurance than others.

Are you still not sure what kinds of insurance policies PEOs offer or which is right for your business? Here’s a basic breakdown of the standard PEO insurance policy offerings.

Health Insurance

Sure, you can get a health insurance policy for your employees through various sources.

However, PEOs partner with qualified insurance carriers. They then pass those benefits along to you. This allows you to access high-quality employee health insurance at lower costs. Likewise, PEO health insurance plans usually carry the same coverage as individual plans.

However, they often come with better benefits such as lower deductibles and discounts on certain products. All in all, this makes getting health insurance through PEOs a more cost-effective way to offer comprehensive coverage options.

Workers Comp

PEO workers’ comp is an insurance policy that provides your workers with compensation if they become ill or injured while on the job. This type of insurance helps protect workers. However, it protects you as a business owner in the case of one of the two following situations:

  • Unexpected medical expenses
  • Lost wages due to an injury, illness, or death

Likewise, the benefits are similar to taking out a PEO health insurance plan. Working with a PEO gives you access to competitive rates and policies from many different carriers.

These companies (like us) can also help assist in managing workers comp coverage. This can save you time and money. It can also save you a whole lot of headaches and hassle.

Disability Insurance

Disability insurance is a policy for employees in case they are unable to work due to severe disability or injury. They can use it to cover medical expenses. It can also help provide day-to-day living guidance for individuals who require more than traditional medical care.

As a business owner, disability insurance is an essential tool that can help ensure important to the well-being of your employees. Additionally, disability insurance offers support in cases where workers cannot fully function or are no longer able to work due to disability or injury.

Furthermore, disability insurance is especially beneficial when accessing it through a PEO. Again, you’ll benefit from reduced costs and access to a wider variety of policy options.

Life Insurance

PEOs also offer life insurance options for their clients. Securing life insurance coverage with a PEO can provide your business with beneficial life insurance options for your employees. This is a great perk that can help you attract and retain top talent.

However, employers and employees alike benefit from life insurance. This is because life insurance policies help both individuals and businesses manage finances and fixed costs.

Additionally, life insurance policies provide workers with added peace of mind. They’ll know that their families will be okay if anything were to happen to them.

A PEO life insurance policy can also offer lower premiums when compared to individual life insurance policies. This can lead to more money in everyone‘s pocket. In short, offering life insurance through a PEO is a smart financial decision for any business.

Unemployment Insurance

Finally, some PEOs also offer unemployment insurance. This can be a great solution if you want to ensure your employees have unemployment insurance but don’t necessarily want to invest in traditional unemployment insurance benefits.

This is beneficial to both you, as an employer, and your employees.

Unemployment insurance protects against loss of wages while providing payments during times of unemployment. This makes a positive statement about your commitment to your staff. It also acts as an incentive for people to join your team and stay on through tough times. 

Benefits of a PEO Insurance Policy

Benefits abound when it comes to working with a PEO. However, there are specific benefits related to getting a PEO insurance policy. From reduced costs to tax filing perks, here’s what you can expect to enjoy when doing business with a brand like National Workman’s Comp Solutions.

Reduced Costs

If you use a PEO for your insurance needs you can save money in several ways. Namely, PEOs can negotiate discounts on bulk orders, thereby providing savings on health, life, and liability insurance packages that you can’t purchase as an individual company.

PEOs also have the advantage of allowing small businesses to pool resources. This means they can offer services such as legal assistance and compliance support at a reduced cost compared to hiring employees or outside firms. When you bundle services together like this along with your insurance policies, you save big time in the long run.


While offering health insurance isn’t a requirement for all businesses in every state, trends seem to be pushing business owners in that direction. After all, why wouldn’t you want to offer your hardworking employees this type of perk? Because it’s too expensive or time-consuming?

PEO insurance makes staying compliant with regulations much easier as they offer tailored packages based on your specific needs. PEOs handle employee management, payroll services, and other administrative tasks on your behalf and understand the specific compliance requirements you have to meet.

By choosing PEO insurance, you can rest easy knowing that you will have the coverage you need without having to worry about navigating complex regulations yourself. PEOs also keep up with changes in legislation. This means they can make sure their customers stay current, helping ensure your company remains compliant all year round.

Payroll & Tax Filing

Another reason why we see so many businesses failing to offer health insurance or workers comp is that it complicates tax filing and administrative tasks such as payroll. However, by utilizing an experienced PEO, you can benefit from their expertise in payroll processing and tax compliance.

PEOs understand how to maximize deductions for each business they work with. This ensures they can provide comprehensive reporting of an organization’s tax obligations. With PEO services, you’ll have access to the most up-to-date tax regulations which can help you optimize the amount of money that is kept in the company’s coffers instead of given away in taxes.

All in all, this allows you to focus on long-term goals instead of worrying about deadlines and paperwork.

Specialists in Workers’ Comp

Finally, when working with a PEO you gain direct access to specialists in workers’ compensation and related policies. PEOs have the necessary knowledge to help you with compliance. They’ll provide you with financial protection from costly claims filed by employees.

PEOs can also offer their services to help assess risks related to workers’ comp, ensuring you’re proactively protecting yourself from costly suits or claims. With specialists dedicated to overseeing such an important part of a business’s operations, owners and managers like yourself can get back to what they do best running the actual business!

Is Workers’ Compensation Mandatory?

Now, you might be asking yourself: What’s all the fuss about workers’ comp? Is it even mandatory?

The answer is not always simple, as the rules and regulations of workers’ comp are set by each state in the US. Generally speaking though, there is a legal requirement for employers to provide employees with compensation coverage in the event of an injury sustained at work or a work-related illness.

In fact, it’s currently a requirement for business owners in every state except for Texas.

Most states have penalties for businesses that fail to comply with the regulations. However, certain businesses are exempt from this requirement. This usually depends on the number of employees and business structure.

Ultimately, it’s worth checking with your state’s Department of Labor. Or, you can simply get in touch with a PEO like ours. We’ll help you make sense of your state’s requirements.

How Much Do PEO Insurance Policies Cost?

PEO insurance policies are typically affordable for employers of all sizes and budgets. Generally, PEO insurance policies cost a certain percentage of the payroll. In other cases, PEOs will charge a flat monthly fee per employee.

However, the exact cost of premiums can vary from business to business. PEOs policies should be flexible and meet the needs of your business needs. This means that if you’re comparing the cost of policies, it’s helpful to ask about how you can personalize the package to fit exactly what your business needs.

Get Quality Workers Comp Insurance

We hope this guide on PEO insurance has been helpful and that you’re now aware of the numerous benefits of getting insurance through a PEO. Our pro advice? Don’t hesitate to make sure you’re covered.

You can get a free quote online or speak with one of our highly knowledgeable agents. We’re here and ready to help you find the coverage that best fits your individual business needs. Get started now and ensure you have complete protection. 

Get In Touch

We are standing by waiting to help you withyour questions – 24/7