Did you know that a PEO insurance policy can drastically improve your business?
Professional employer organizations (PEO) are companies that provide businesses upon benefits for joining them. Whether you have a small or large business, you can enjoy several services that PEOs offer, allowing you to focus on other parts of your business.
When it comes to health insurance, many businesses struggle to provide employees with sufficient benefits. This is especially common with small businesses because they usually don’t have enough money to offer the best policies. Fortunately, PEOs offer health insurance, so you should know how it works.
Read on to learn more about PEO insurance and what PEO companies do!
What Is a PEO Insurance Policy?
A PEO insurance policy is something that allows smaller businesses to provide employees with health insurance. PEO lets employees enjoy the same benefits that those of larger businesses enjoy. Without a PEO health plan, employees won’t have access to things like workers’ compensation.
Workers’ compensation allows employees to get compensated when they’ve been injured at the workplace. This provides them with the means to pay for medical expenses and get paid for the time they’re out of work. However, it usually only covers injuries that were caused by negligence from someone else.
Benefits of PEO Insurance
Many small businesses invest in PEO companies solely for their health insurance. A PEO insurance policy allows businesses to do a variety of things without having to worry about healthcare. Because of the several benefits that PEO insurance provides, it’s worth investing in no matter how small your business is.
Here are some of the main benefits of PEO insurance:
Same Coverage as Large Corporations
One of the problems that many employees have when working with smaller companies is not getting good health insurance. However, a PEO insurance policy can rid them of their worries because it’ll offer them the same health benefits that other businesses provide their employees.
When you’re offering similar health benefits to employees, they’ll be more likely to stay with your company. You’ll also have an easier time getting new employees because they can see that the insurance benefits are good.
Allows Businesses to Focus on Their Cores
Another benefit of investing in PEO insurance is being able to focus on your business’s core. Health insurance can take up a lot of resources if you’re trying to manage it by yourself. With a PEO company, you can outsource anything health-related so that you can continue growing your business.
This also prevents you from getting a plethora of questions from employees. You can refer them to the PEO whenever they want information about their benefits.
Offers a Variety of Services Outside of Health Insurance
While many businesses work with PEO companies for health insurance, they can provide several other services that’ll benefit your business. PEOs offer services that cover payroll, human resources, compliance support, and more. Outsourcing all of these to one service will ensure that you have the time to do other things.
What Do PEO Companies Do?
Professional employer organizations were created to give businesses a way to handle HR tasks without having to waste too much time and money. Joining a PEO can give you a way to take care of most of those tasks without using many resources.
When you hire a PEO, you’re essentially hiring an employee. You can choose what you want the PEO to do, providing that you two mutually agree on the tasks. After signing a contract, the professional employer organization can start handling everything you agreed on, including providing PEO insurance.
You can expect to choose from a large list of tasks to have them do. When it comes to PEO insurance, they’ll provide employees with retirement plans, health insurance, life insurance, disability insurance, etc.
They can also provide employees with training resources to ensure that workplace injuries don’t happen. You can work alongside the PEO to develop a program that applies to your company and cover various positions.
What Is ASO in HR?
An Administrative Services Organization (ASO) offers most of the services that a PEO does. When hiring an ASO, you can expect to outsource things like payroll and compliance. An ASO can also help you find a health program for your employees.
What Is the Difference Between a PEO and an ASO?
The main difference between a PEO and an ASO is that a PEO acts as a co-employer. When working with an ASO, they’ll do everything under your company’s Tax ID, so you’ll retain liability for performed services. They also can’t offer health benefit programs, so you must find coverage from another service.
What Are the Differences Between the Services Offered by an HRO, ASO, and PEO?
Human Resource Outsourcing (HRO) is similar to a PEO, but it allows clients to choose exactly what they want to be managed. While an ASO can provide a company with guidance, an HRO can take care of most HR-related things that your business needs.
If you’re looking to outsource all HR tasks, a PEO would be the best option. Those that want to outsource some HR tasks but maintain control should go with an HRO. When it comes to seeking guidance, an ASO can provide your company with everything it needs to improve.
Is a PEO a Good Idea?
Determining whether joining a professional employer organization is a good idea will depend on what your goals are. If you have a large corporation, joining one wouldn’t make much sense because you’d have the means to take care of everything that a PEO can offer.
However, those with small to medium-sized businesses would benefit greatly from joining one. Because of the risk protections, workman compensation, and other benefits, joining a PEO is worth the investment.
If you don’t have a problem taking care of HR tasks, you may not need to join a PEO. Those that would like to save as much money as possible to put back into the business should join one.
Think about the state your business is in and determine whether joining a PEO would be a good move. Only you can decide if it’s a good idea!
Now You Know What PEO Insurance Is
After reading this article, you know everything you need to know about professional employer organizations. While a PEO can provide businesses with a plethora of benefits, including PEO insurance, it’s not for everyone. Now that you have a better understanding of PEOs, you can figure out if you should join one.
We encourage you to consider joining a PEO if you have a small business that’s struggling to grow. You’ll not only satisfy your employees, but you’ll also save a lot of money in the process.
Contact us to learn about how we can provide your business with workers’ comp!