PEO News Update

Key Factors When Entertaining a Change to Your PEO Provider

Thu, 06 Feb 2025 20:43:43 GMT

Key Considerations of Entertaining a PEO Change

Deciding to switch Professional Employer Organizations (PEOs) can be a frightening task to tackle and is a decision that should not be taken lightly. With so many moving pieces and factors to consider it is important to invest the proper amount of time in understanding all of the pieces of your business that will be touched by making a change.

While there are many catalysts ranging from an increase in administrative costs, health insurance costs, and workers compensation costs to inadequate service levels one needs to keep in mind that changing from one PEO to another comes with potentially different legal structures, payroll software, access to HR expertise, 401k offerings, and more.

While this transition can offer numerous advantages, it’s vital to approach the changeover thoughtfully to ensure a smooth process. Today we are diving into the benefits of switching PEOs while also exploring the essential factors you should consider when making such an important change.

Benefits of changing PEO Vendors

Cost Efficiency

Lower Fees: Often we find that clients may not be using all of the services that a PEO is offering. In these scenarios we try to educate our clients on understanding what value can be gained from implementing these additional services available to them or showcasing alternative PEO options that do not require a group to pay for their entire suite of products. In the event the additional services are unneeded, there are often alternative providers that can provide a similar or improved service level at a more value driven price point.

Transparent Pricing: There are a lot of moving pieces with PEOs and if you are not an expert at knowing where to look or are confused on how percentage of payroll or bundled billing works over time you may not have realized there was a cost increase. If making a change it is important to negotiate in your contract the ability to understand any and all costs so they are easily found in reports when needed.

2. Enhanced HR Services

Comprehensive Support: People are often surprised to know there are many private PEOs that often offer more robust HR services than many of the more well known brands. While PEOs like TriNet, Insperity, and other big box players have adequate offerings for the right groups, there are some PEOs that provide a much higher level of communication and take more of a hands on approach to HR support, offer stronger benefits administration, and provide a niche solution specifically tailored for companies in certain industries that many end users find valuable.

Specialized Human Resources Expertise: There are certainly different levels of HR expertise that one gains access to at different PEOs. Some go as far as offering HR Attorneys and Tax Advisors while others offer HR Professionals with varying levels of experience. Be sure to get an understanding of which is best for you and that the PEO can deliver.

3. Improved Employee Benefits

Improved Employee Benefits: PEOs are constantly improving their benefits offerings. Due to changes in your business, employee base, the overall market or the individual PEOs themselves there is a possibility that making a change could offer access to a more robust employee benefit suite that could boost employee satisfaction and retention.

Cost Reductions: In some situations there is a possibility of large benefit cost reductions. There are many strategies that can be put in place to lower health and disability insurance costs.

4. Advanced Technology

User Friendly Systems: The most common PEO HRIS platform is Prism and if you are with a PEO who uses Prism and would like to continue to use Prism with a new provider you will have plenty of options to do so. Other common platforms used by multiple PEOs are Isolved, UKG and Worklio. Insperity is working on upgrading their technology through a joint venture with Workday. ADP and Paychex have platforms that can scale for companies that have large growth plans. Justworks has a great technology platform and while Rippling also has good tech unfortunately their service model needs major improvement before being considered.

Enhanced Reporting: It is important to set expectations with your PEO before contracting with them on what custom reporting needs you will have. Most PEOs can create any report you need and can even build them for you to make integration with almost any outside vendor possible.

What to Evaluate When Changing PEO Vendors

Service Offerings

Lower Fees: Often we find that clients may not be using all of the services that a PEO is offering. In these scenarios we try to educate our clients on understanding what value can be gained from implementing these additional services available to them or showcasing alternative PEO options that do not require a group to pay for their entire suite of products. In the event the additional services are unneeded, there are often alternative providers that can provide a similar or improved service level at a more value driven price point.

Transparent Pricing: There are a lot of moving pieces with PEOs and if you are not an expert at knowing where to look or are confused on how percentage of payroll or bundled billing works over time you may not have realized there was a cost increase. If making a change it is important to negotiate in your contract the ability to understand any and all costs so they are easily found in reports when needed.

2. Compliance and Risk Management

Regulatory Compliance: It is important to investigate the new PEO's track record for regulatory compliance and their ability to stay ahead of legal changes. Some do a great job of keeping your team up to speed on need to know regulatory information where others have resources that you gain access to for self education. The best have both.

Risk Management: Evaluation of a PEO's Risk management team is vital to long term success. Understanding what you gain access to in regards to Workers Compensation can keep premiums down and workplace incidents low. Their ability to manage unemployment claims, reduce State Unemployment Tax rates, and limit exposure to other liabilities can save your company stress and resources while keeping employees happy.

3. Impact on Employee Benefits

Carrier or Deductible Changes: Medical deductibles are an obvious place to look when changes are being made. However it is important to think about FSA account balances, HSA allowances, and 401k black out periods as well.

Cost Reductions: You can not only focus on costs in the health insurance part of the equation. It is important to verify that network strength, plan designs, pharmacy structures, and other elements of the health insurance plan are not going to present surprises after being implemented.

4. Transition Process

Implementation Plan: The most stress will certainly presentation itself in the implementation process if a good plan is not organized with timelines in place. It is by far the area where the most can go wrong so be sure that the PEO and your team has a clear understanding of expectations.

Data Migration: While you can negotiate a time to have access to all of your data from your previous provider, it is still a good idea to take precautionary measures and download or migrate all of your relevant employee and payroll data.

5. Contract Terms

Contract Flexibility: Examine the contract terms and look for areas where flexibility can be introduced including the length of the agreement and conditions for termination or renewal.

Termination Fees: While termination fees are necessary to protect the interests of the PEO, they are certainly negotiable and should reflect terms that are fair to both sides with reasonable termination periods.

Confidence in a PEO Switch

Changing from one PEO to another comes with a lot of thought, evaluation and scrutiny, but it certainly can be done in a way that provides long term benefits for the company and its employees. By going through a thorough evaluation process you can ensure a smooth and successful transition that ultimately provides benefits that create a stronger employee experience and position the company for years of long term growth.

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What to Look For in PEO Health Insurance Renewals

Mon, 08 Jul 2024 21:18:49 GMT

Understanding Your PEO Health Insurance Renewal

Many PEO health insurance renewals come out in Q4 and January 1st is always a big benefits renewal period - so let's explore how you can prepare and evaluate for your annual insurance renewal review.

Let’s first revisit how benefits work within a PEO relationship. PEO’s use a “co-employment” arrangement with their clients so when a business joins a PEO, through that co-employment arrangement the small business now becomes part of a large business (i.e. all the PEO’s clients aggregated).

This means the PEO can spread the risk over a large number of employees amongst many of its clients and offer health insurance along with other benefits at a lower cost compared to the options available in the open market. They also are able to add higher levels of predictability and flatten the renewal curve. However, in order to get these advantages, your benefit choices are somewhat limited since you are covered under the PEO’s Master plan and hence limited to the plan options that the master plan offers.

Now Let's Talk About PEO Health Insurance Renewals

In general, anything below 10% is considered a strong renewal and over the past 10 years or so the PEO relationship has provided the best results at achieving that goal. As healthcare and pharmaceutical costs continue to rise most states are seeing trend increases between 11% and 15% on the open market health insurance plan options.

When participating in a PEO master plan what determines your renewal is a myriad of factors but it's primarily a combination of the overall pool of groups that make up the health insurance plan and your personal groups claims performance or loss history, which is the number of claims and severity/cost of those claims as compared to the total collected premium. The PEO will also factor in the likelihood of what claims will be ongoing vs which were individual instances such as child birth or a broken bone.

While your Medical Loss Ratio or MLR can play a large role in your renewal, it can often be difficult to obtain as PEO's do not always have access to specific claims history that can paint a clearer picture of the groups overall health. For the PEOs that do have access to the information it is also possible that the teams that you have access to are unaware making it very difficult for you to get ahold of that information.

Some Other Factors that Can Influence PEO Health Insurance Renewals - What to Look Out For

Association Style Medical as Opposed to Master Plan

The PEO may spread the renewal equally across all clients regardless of how each individual client performed - in this scenario, your renewal will be a result of quality of clients the PEO brings on. If you are a relatively healthy group you may be negatively impacted in this scenario compared to other PEO options.

Plan Balancing

The PEO may strategically apply rate increases to specific plans to drive (or limit) usage – for example, to keep a renewal low, they could greatly increase the rates on their richer PPO plans and have a very low increase on the HDHP plans to drive client usage to HDHPs which tend to keep claims low (since the user has to first satisfy the “high deductible” before insurance kicks in and shares some of the cost). This is a potential sign that the PEO is not managing their book well and could be in danger of higher renewals in the future.

Performance Weighted

The PEO may strategically apply rate increases by customer to encourage clients to “self-select” away from the PEO – high cost of service clients or those driving high benefits or Workers Compensation claims may get higher benefits renewals to encourage them to

switch PEOs (or the PEO captures a higher margin should that client decide to remain with the incumbent at the higher rates). This is an unethical practice that can be difficult to navigate. It is important to get as much data as possible in this scenario to provide to alternative providers in an effort to keep costs in line with where they should be.

Exploring Options if You Receive A High Increase

If you receive a high rate increase on your renewal, there is no need to panic just yet as there there are several options that may work to reduce the initial number.

There may be an opportunity to negotiate with your current PEO (they may not necessarily want to give a high renewal as they know that increases the chances of losing client).

Some groups know that they will have a lot of ongoing claims for the next year and instead of attempting to lower the premiums they adjust their overall benefits strategy (plans offered and employer contribution scheme) which typically dilutes the benefit solution while reducing pricing.

Then for those where it makes sense, switching to a new PEO or looking at open market options (fully insured, level-funded, self-funded, Reference Based Pricing, etc) will often produce the best long term results.

A couple of things to keep in mind if you are considering switching PEOs:

If your renewal is over 20%, some PEO groups will not want to quote you on their master health plan without having employees complete health questionnaires. It is important to know which PEO groups will be able to underwrite the more traditional way and which will not.

In some cases when your renewal is this high, there are drivers

that may be known to be ongoing over the next 12 to 15 months.

This is where a PEO with good flexibility to work with open market

or self funded health insurance solutions can become very

valuable.

There are many PEO groups who are able to bundle in the open

market health insurance solutions into their systems and have

them still feel like they are the PEO master plan when it comes to

administrating the plans.

This can allow your group to take advantage of the open market

plans until the know claims have run their course before hopping

back on to a different health insurance strategy without sacrificing

the preferred administrative experience that PEOs can offer

via their HRIS systems .

2. Insurance Carriers often put in place a "Parity Rule" on PEO master plans. This rule varies from agreement to agreement and most

commonly caps a health insurance rate reduction to 5% for groups coming to the new PEO if the previous PEO had the same health

insurance carrier. This is seen with Aetna plans the most, but all

carriers have been known to put these clauses in place.

For example, if are on Aetna via PEO A and request a quote from

PEO B who also uses Aetna for their master health plan, PEO B may

not be able to provide a quote lower than the 5% parity rule allows

even if they feel the group has considerably less risk than that price

point. If this is identified it is good to look at alternative carriers or

level funded insurance plans to maximize savings for health

insurance premiums.

We Can Help Reduce Your Health Insurance Costs

As you can see there are a lot of moving parts to the renewal and your options for addressing it. It's unlikely you can afford to take your focus off running your business to devote the time to dealing with this but given the magnitude of benefits costs, you almost can't afford not to and that's where we can help.

Why not leverage industry experts that can procure quotes for you, that understand the underwriting requirements of various PEOs and Insurance Carriers, and come back to you with a consolidated, comparable comparison of the options and provide reccomendations?

PEO Focus is happy to provide this consultative approach at no cost- we can not only help with the PEO and benefits selection but also with devising a benefits strategy that makes your firm highly competitive for talent while avoiding breaking the budget!

To keep costs low, even with low renewals year or year this evaluation should take place at a minimum once every three years. With changes in demographics, changing healthcare needs, and other factors that impact pricing we often are able to find ways to reduce costs.

About the Author

BREAKING NEWS 2025 HSA and FSA Limits are out!

Mon, 24 Jun 2024 21:24:04 GMT

IRS Releases 2025 HSA and FSA Contribution Limits

The Health and Flexible Spending Accounts Can Offer a

Great Tax Break When Used Properly.

That time of the year seems to have gotten here sooner this time around as the IRS has released inflation adjustments to Health Savings Account limits and High Deductible Health Plans for 2025!

There is an increase of $150 for employee-only coverage which represents a 3.6% move higher based on 2024 rates. On the family contributions the limit had an increase of $250 or 3% compared to 2024.

On the combined scenarios the contribution limits are significantly less than the roughly 7 percent increase that was seen from 2023 to 2024.

The IRS has not released as of yet, any changes for the 2025 catch-up contribution for savers age 55 and older and it currently remains at $1,000 with no changes reported from 2024.

Meanwhile, for 2025, a High-Deductible Health Plan must have a deductible of at least $1,650 for self-only coverage or $3,300 for spouse, children or family coverage compared to $1,600 and $3,200 from 2024.

Annual out-of-pocket expense maximums (deductibles, co-payments and other amounts, but no premiums) cannot exceed $8,300 for self-only coverage and $16,600 for family coverage for the 2025 plan year.

In addition to the HSA and HDHP changes the IRS has announced that the 2025 HRA limit will be $2,150.

2025 HSA and FSA Contribution Eligibility

HSA: You must have a high deductible health plan (HDHP) to open a health savings account (HSA).

Medical FSA: Can be paired with Medical Plans other than HDHP Plans.

Limited FSA: Can be used for expenses such as Dental and Vision. Participants in a HDHP Medical Plan are eligible.

Tax Information Regarding HSA and FSA Accounts

- It can be a smart way for employees to save for medical expenses,

given their triple tax benefits:

Contributions are made pretax
The money in the accounts grows tax free
Withdrawals for qualified medical expenses are tax free.

- If you exceed contributions for either your HSA or FSA accounts the excess amount will be subject to income taxes.

- A tax penalty of 6% will also apply to any amount that is over the

contribution limit.

Any mistakes made by exceeding the contribution limit can always be corrected if you withdraw the excess funds before the federal tax filing deadline. Interest earned also counts!

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PEO Focus Named Best North Carolina Employee Benefits Consulting Firm for 2024

Fri, 16 Feb 2024 19:55:01 GMT

PEO Focus Named Best NC Employee Benefits Consultancy 2024

PEO Focus is proud to be honored as the the Top Employee Benefits & Recruitment Consultancy in North Carolina for 2024.

At PEO Focus, we provide our clients with the advantages they need to achieve modern business success in Human Resources and Employee Benefits Strategies.

We take pride in being a Consulting Firm that focuses on bringing transparency to the employee benefits sector such as Group Health Insurance, Retirement Benefits, and Outsourced Human Resource solutions such as PEO, ASO, EOR, and more.

Our clients are put in a position to make educated choices that will provide the most value to their business and employees. We consult on all matters from identifying which groups provide the best fit to helping you transition from them when your business takes the next step and everything in between.

Our expertise allows our clients to make decisions with confidence and focus more energy on other areas of need while saving time and reducing costs.

We are honored to receive this award from Corporate Vision and looking forward to helping our clients in 2024 and beyond.

Interested in our Consulting Services ? Connect with us today to discover how we can help you!

Identifying differences between EOR and PEO.

Sat, 20 Jan 2024 14:33:55 GMT

Professional Employer Organization vs Employer of Record...Is Their Really a Difference?

Let's take a quick ride and learn the main key factors that would help us understand the differences between these 2 HR administration models.

PEOs are the shining star of the sky, just a quick reminder on the concept. Professional Employer Organization ’s (PEO) provides comprehensive HR (Human Resources) services to client businesses.

They operate by establishing a co-employment relationship with their clients, wherein the PEO becomes a partner in handling various HR-related functions while the client retains control over the day-to-day operations and management of their employees.

But just as the universe, there are many other stars and there is an alternative option call Employer of Record (EOR) which is a service provider or entity that takes on the legal responsibilities associated with employing workers on behalf of another company or client.

When a business engages an Employer of Record, the EOR becomes the official employer for the workers, handling various employment-related functions and administrative tasks while the client company retains managerial control over the employees' day-to-day activities.

The primary role of an Employer of Record includes employment compliance, payroll and benefits, HR administration, Risk Management, and International Expansion support.

EOR allows companies to focus on their core business operations while delegating the administrative and legal responsibilities of employment to a specialized service provider.

This arrangement enables business to access global talent pools, expand into new regions without setting up legal entities, and maintain compliances with employment regulations in different countries and regions.

By partnering with a Professional Employer Organization , businesses can leverage the expertise and resources of the PEO to streamline HR functions, reduce administrative burdens, access better employee benefits , and improve compliance with laws and regulations.

This allows the companies to focus more on their growing business activities and strategies. Typically, a PEO will take care of the following duties: HR administration, payroll and taxes, employee benefits, HR compliance, Risk Management, employee relations support, Recruitment, and training.

Although, they are both related to employment and human resources, and may look similar, they serve different purposes and involve different structures.

Two Key Differences Between EOR and PEO

· Employer Relationships : EORs directly employ and manage workers on behalf of a client company, becoming the official employer for legal purposes in a specific location. In contrast, PEOs stablish a co-employment relationship with client companies, sharing employer responsibilities while the client maintains control over operations.

· Scope of Services : EORs mainly handle employment and administrative duties for international or multi-location entities, focusing on legal compliance and local employment requirements. PEOs offer a broader range of HR services, covering various aspects of HR management for client companies.

Exploring These Outsourced HR Solutions Further

Both EORs and PEOs aim to support companies in managing their HR-related tasks more efficiently, but their structures, purposes, and the nature of their relationships with clients’ companies differ significantly.

EOR relationship is typically direct and straightforward. The EOR becomes the legal employer of the workers on behalf of the client company in a specific location or jurisdiction. The PEO and a client company enter into an agreement with sharing responsibilities on while the client retains control over day-to-day operations and management of employees.

The EOR relationship is more focused on providing localized employment solutions, especially for companies expanding internationally or entering new markets. The client company relies on the EOR’s expertise to handle the legal and administrative aspects of employment in that specific location. PEOs operate by establishing a co-employment model.

Bottom line, the relationship with an EOR involves the EOR assuming full legal responsibility for employing workers in a specific location, whereas the relationship with a PEO involves a shared responsibility arrangement. At the end of the day both offers solutions for managing HR needs.

The wisest advise for a business own er or administrator is to take a clear and close look at both models and verify which could be the best for your next big step with the company.

You might be wondering; how do I make such an important decision? Here is a starting point, we have accommodated several key factors to ensure you select the right service provider that aligns with your needs and goals.

1- Service offerings and expertise:

Evaluate range of services offered by both models. Consider if they cover your specific HR needs, such as payroll processing, benefits administration, compliance, risk management, etc.

Now, having is not the same as delivering so assessing the provider’s expertise and experience in handling HR functions, especially in your industry or the regions where you operate or plan to expand.

2- Legal Compliance and expertise:

Ensure that the EOR or PEO has a strong understanding of local employment laws and regulations, especially if you are looking to expand or operate in multiple jurisdictions.

Verify their track record in compliance management and their ability to adapt to changing regulatory environments.

3- Reputation and references:

Research the provider’s reputation in the industry. Look for reviews, testimonials, or case studies from other business that have used their services.

Many of your clients always ask for a list of references and all the options available out there are always thrilled to share their success by presenting clear examples.

4- Financial stability and Insurance coverage:

Consider their financial standing and longevity in the industry to ensure stability and reliability in service delivery.

Inquire about insurance coverage and risk management practices to protect your business in case of issues or liabilities.

5- Technology and Systems:

Technological infrastructure and systems used by the EOR or PEO. Ensure they have efficient and secure platforms for payroll processing, HR management, and data security.

It is important to consider the compatibility with your existing systems or the ease of integration with their platforms.

6- Client support and communication:

Evaluate the quality of client support and communication. Consider responsiveness, accessibility, and level of personalized service provided.

Check the availability of dedicated account managers or support teams to address you queries or concerns promptly.

7- Cost and contractual agreements:

Fully understand the fee structure and pricing models offered by the provider. Compare costs side-by-side, which is a service that we PEO Focus always prepare for our clients’ reviews.

Review the terms of the contract, including service-level agreements, termination clauses, and any hidden fees or additional charges.

8- Flexibility:

Consider whether the provider can accommodate your business’s growth and scale their services accordingly.

Assess their flexibility in adjusting services or adapting to changes in your business needs.

By considering in a careful manner these factors and conducting thorough due diligence, you will make sure that you will select the right EOR or PEO that best fits your business requirements, ensures compliance, and provides efficient support to achieve your goals.

Reaching an expert in the matter is always the best, someone than can guide you through the entire process and you may have the confidence that all decisions will be made thinking of you first. PEO focus is the right option to star t such an important journey.

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Justworks Launches Payroll Solution

Tue, 09 Jan 2024 15:13:52 GMT

Justworks Releases Payroll Only Technology Solution

Justworks, one of the largest Professional Employer Organizations that serves small and medium sized businesses with lightweight and flexible PEO and ASO solutions has just added a Payroll only solution to put themselves in a better position to grow with their clients.

While currently offering bundled payroll, compliance, HR, employee benefits administration, and outsourced employment-related responsibilities Justworks is pleased to report they can now offer their industry leading HR technology platform as a payroll only solution to companies headquartered in certain states.

Aiming to simplify HR operations for small and mid-sized business by offering an integrated platform, the payroll only solution allows Justworks to provide access to smaller clients who may not yet be in a position to need all of the benefits that come along with their ASO and PEO solutions but still want access to payroll technology that they can scale with as they grow.

On the other end of the PEO spectrum, clients who partner with PEO’s and have plans to scale have often looked at ADP TotalSource, Paychex, and PEO’s that use Isolved or UKG payroll software to allow for a transition away from the PEO when they become large enough. Justworks now joins the short list of PEO’s that can grow with their clients without them being forced into an eventual technology change down the road in regards to payroll.

Justworks Payroll is the company’s first new standalone product since it launched its Professional Employer Organization in 2012.

Their technology has long stood as one of the strongest in the industry with its intuitive and easy-to-use software coupled with 24/7 human support. Justworks disrupted a legacy industry and now serves over 10,000 US-based customers operating in predominantly desk-based, white-collar industries (like technology and professional services). It’s quite a small number compared to the actual number of companies that would benefit from this exciting new product.

Justworks Payroll Brings Flexibility

Justworks is excited about the expanded reach the solution provides which can allow them to provide services to small businesses that are not in a position to take advantage of the PEO co-employment model.

The entrepreneurial community, businesses in riskier industries or those that have more diverse payroll, HR, and compliance needs often approach Justworks for their experience. Not all of them are always a good fit for the PEO product, but need a tech-forward platform, high level service and support that truly understands how to fulfill their needs. A tool that can take complex tasks off of your plate so you can dedicate more time to your business growth.

Justworks Payroll is available as of today in 11 states (NY, CA, TX, FL, MA, IL, NJ, GA, NC, AZ, ME, CO, VA, MD, CT & the District of Columbia) and they are planning to expand to all 50 states soon. The solution costs $50 per month plus $8 per employee per month. Your business may be as little as 1 employee and they can assist with contractor-only businesses as well.

Here is a closer look at the services offered:

Payroll for salaried & Hourly employees
Contractor Payments
Flexible Pay Cycles
Off-Cycle Payments
Benefits deductions-401k and more
Multiple pay rates
Generated w-2 and 1099 documents
State and federal tax returns- quarterly, annual.
Basic timecards
Support-within 1 business day
Employee onboarding & offboarding
Employee job history summaries
PTO Management
Calendar, doc center, directory
Quickbooks online integration
Reporting

Clients also get access to:

Time tracking ($4 per employee per month for a limited time, including admins and managers with approval permissions).
State tax account setup
Benefits

Justworks Payroll was built with small businesses in mind, including contractor-only businesses however there are some exclusions that everyone needs to be aware of.

The following industries are not eligible for the Justworks Payroll only solution: Cannabis, gambling, adult entertainment, household employment or agriculture.

Justworks is a New York PEO headquartered in Manhattan. They have employees throughout the United States and have are licensed in all 50 states.

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Understanding the Pros and Cons of PEOs

Fri, 05 Jan 2024 18:39:47 GMT

How PEOs Work to Make Your Company Grow

Since we are little, one of the main questions we get asked all the time is what you want to be when you grow up. All of us might have different ideas and dreams. Let’s say you are that percentage that kept dreaming to be your own boss and get your own company and by the time it happens, there is a point where it is growing, just like you did!

Your long-time dream now needs help, and most of the time the Human resource area is most likely to need that help. Becoming an expert on labor regulations, HR administration, payroll, benefits, and compliance is almost a must on any business, which is great because knowledge is a treasure now a days. The sad part of this is how time consuming it can be.

This is where the PEO ( Professional Employer Organization ) comes along to save the day, or not? Today we’ll give you the greatest parts of partnering with a PEO but also the challenges it may have on the road which do not necessarily have to be bad.

But wait a second, why me, as a small business owner who even needs to think about this? Well, did you know that 17% of your time goes directly on manpower and non-core business tasks?

You may already know this but understanding not only the meaning but also the concept, will always help. A PEO is a third-party company that handles HR tasks and employee management responsibilities for small and medium-sized businesses. Businesses that partner with a PEO experienced twice the revenue growth of their non-PEO competitors. PEO clients are also 50 percent less likely to permanently close .

Let’s not do the typical comparison table to check on what’s great and maybe not that amazing from the PEOs. Instead, we’ll check a couple of scenarios that will help us understand all the bullet points from a better perspective.

· Cost savings: PEOs can potentially reduce costs by consolidating administrative tasks, leveraging their purchasing power for better rates on benefits, and streamlining processes. Processes such as payroll processing, tax filings, workers' compensation claims, and compliance-related paperwork. By outsourcing these functions, businesses can save on the costs associated with hiring and maintaining a dedicated HR department or investing in specialized HR software.

While PEOs can offer cost savings, their services come with fees. Understanding the fee structure, potential hidden costs, and whether these expenses align with the company's budget is crucial.

· HR Expertise and Support: PEOs offer HR support, assisting with payroll processing, compliance with employment laws, managing employee relations, and handling administrative tasks.

Companies may feel a loss of control over HR functions and employee-related decisions, as PEOs handle many administrative tasks and some aspects of Human Resources management.

· Risk Management compliance: PEOs assist in managing compliance issues, staying updated with changing employment laws, reducing risks associated with HR-related lawsuits, and ensuring that businesses adhere to regulations. Transferring into or out of a PEO relationship can be complex and may involve legal and administrative challenges.

· Employee development and training programs: Some PEOs provide resources for employee development and training, fostering a more skilled workforce within client companies. A company's reputation can be influenced by the performance and service quality of the PEO. If the PEO fails to deliver on promised services, it can affect the employer-employee relationship.

Now, let’s review with a scenario.

ABC Corporation is a small manufacturing company with 75 employees. Before partnering with a PEO, ABC Corporation struggled to offer comprehensive employee benefits due to the high costs associated with purchasing health insurance and retirement plans for their relatively small workforce.

By joining the PEO's benefits pool, ABC Corporation gained access to a wider range of health insurance plans, retirement options, and other employee benefits at more competitive rates than they could secure independently.

Besides assisting on all administrative tasks like payroll processing, benefits enrollment, and compliance, freeing up ABC Corporation's HR department to focus on strategic initiatives rather than day-to-day administrative duties it also provided expertise in navigating complex healthcare regulations and employment laws, reducing the risk of costly compliance-related errors or penalties.

As a result, improved employee satisfaction and operational efficiency.

Still need more examples. Let’s review scenario #2

XYZ Marketing Solutions is a mid-sized marketing firm specializing in digital advertising and content creation. With around 120 employees, the company faced challenges in managing HR tasks, providing competitive employee benefits, and ensuring compliance with evolving employment laws.

The PEO streamlined HR functions by handling payroll processing, benefits administration, and compliance-related tasks. This freed up the internal HR team's time to focus on strategic initiatives and employee engagement.

With access to better benefits and improved administrative efficiency, employees experienced a positive impact. They had access to a wider array of benefits options and a smoother benefits enrollment process.

As a result, experienced operational improvements, cost savings on benefits, reduced administrative burden, and improved compliance, ultimately contributing to a more efficient and competitive company structure.

OK, but what all these means? I mean, for my long-time dream, my precious baby, is it really what I need for my company?

It’s no secret a PEO will provide expert support as your HR partner. Human Resources expertise is crucial to the success of your business. Errors from your HR department can potentially cost your company thousands. Hiring the wrong HR personnel can increase your risks of fines, workers’ compensation claims, and lawsuits. A PEO with recruiting expertise can protect your organization from hiring the wrong people.

You’ll enjoy cost savings when you partner with a PEO. A study conducted by noted economists Laurie Bassi and Dan McMurrer of McBassi and Associates on behalf of the National Association of Professional Employer Organizations (NAPEO) found that businesses enjoy a cost savings of 27.2 percent when they partner with a PEO. According to the study , the average cost savings for groups partnering with a PEO is $1,775 per year per employee, which also reinforced the findings of earlier research, again showing notably lower employee turnover, higher rates of both employee and revenue growth, and enhanced employee benefit offerings.

Partnering with a PEO has important and beneficial tax implications for your company. A PEO will become your “co-employer.” Under this arrangement, the PEO can withhold employee federal and state taxes. The PEO then pays the government the withholdings.

The reality of employee management may cast a shadow on your dreams when you’re a business owner. But an HR partner can help to reduce the time you spend on less creatives activities that may be holding you back from growing your business even more. With so many PEO companies out in the market once you have a trusted ally who can navigate the burdens of HR administration, you can go back to focusing on what you really are passionate about.

2024 HSA and FSA Limits

Thu, 28 Dec 2023 16:34:25 GMT

New Year New Rules, IRS Releases 2024 HSA and FSA Contribution Limits

The Health and Flexible Spending Accounts Can Offer a

Great Tax Break When Used Properly.

Even though your contribution to any of these accounts are tax-free, there are limits on how much you can contribute to an HSA or FSA each year.

Since these accounts allow users to place money into them tax free, there are penalties that are put in place in the event someone attempts to over contribute.

The IRS just announced medical savings account contribution limits for 2024 and the numbers are around 7% higher than the previous contribution limits for 2023.

2024 HSA and FSA Contribution Eligibility

HSA: You must have a high deductible health plan (HDHP) to open a health savings account.

Medical FSA: Can be paired with Medical Plans other than HDHP Plans.

Limited FSA: Can be used for expenses such as Dental and Vision. Participants in a HDHP Medical Plan are eligible.

There are a few factors to consider:

- HSA and FSA accounts have different rules for Business Owners . click to learn more.

- If you exceed contributions for any (HSA or FSA) the amount will be subject to regular income tax.

- Tax of 6% will also apply to any amount that is over the contribution limit.

Any mistakes made by exceeding the contribution limit can always be corrected if you withdraw the excess funds before the federal tax filing deadline. Interest earned also counts!

Click here for information regarding 2025 HSA and FSA Limits

About the Author

PPO, HMO, POS, EPO - Exploring the Differences of Health Insurance Plan Network Types

Tue, 24 Oct 2023 01:06:29 GMT

Understanding the Differences of PPO, HMO, POS and EPO Networks

Let's dive right in and identify the types of networks that are available and how they impact your access to healthcare.

When choosing between Health Insurance plan options one of the major points of consideration is the network options that the plan may come with.

When shopping in an individual network you are choosing the plan that is best for you where those choosing plan options for Employee Benefits packages a Group Health Insurance suite of plans may benefit from having multiple plan options to choose from.

Here are the four major plan networks and how they differ from each other.

Preferred Provider Organization (PPO)

Preferred Provider has higher premiums than a Health Maintenance Organization (HMO) or Point of Service (POS) network but this plan lets you see specialists with both in and out-of-network doctors without a referral. Copays and coinsurance for in-network doctors are typically lower than in other networks so the insured is more likely to seek out care if needed.

This network is optimal for those who have healthcare needs with providers that do not participate in insurance networks as those who are insured can seek care both within the PPO network and out of it.

While there is certainly a premium for seeking care outside of the PPO network, many like the ability to have a fixed set of costs in the event they prefer to receive care from out of network providers.

Health Maintenance Organization (HMO)

One of the most affordable types of health insurance networks, HMO plans consist of a network of doctors, hospitals and other healthcare provider groups who agree to a fixed payment structure for healthcare services rendered to its "members". One is a member of the HMO network simply by electing an HMO health insurance plan. This structure allows those providers to have a steady flow of business directed their way while also being able to provide better pricing for care than a PPO network.

In an HMO plan, the insured is usually required to have a designated Primary Care Physician (PCP) that develops a relationship with their patients that puts them in a position to deliver higher levels of care. The PCP is often required to provide a referral to their patients for them to see specialists or surgeons.

Some enjoy the gatekeeper method found in HMO plans as it can help them save money and have confidence about how they spend their dollars budgeted for healthcare while others prefer to be able to schedule meetings with specialists without having to obtain a referral beforehand.

Point of Service (POS)

It is safe to think of a Point of Service (POS) plan as being a blend between the PPO and HMO style network plans.

Like an HMO, the POS plan requires you get a referral from your primary care provider before seeing a specialist.

Like a PPO, the POS plan provides coverage for both in and out of network providers.

In these plans there is the possibility of paying the discounted in network pricing if the Primary Care Physician refers the insured to an out of network specialist.

Exclusive Provider Organization (EPO)

An Excusive Prover Organization or EPO is perhaps the most appropriately named network.

Members who elect plans in this network are covered only when using providers that are exclusively part of the network unless there is an emergency situation.

Similarly to a PPO network there is no requirement to receive a referral before seeing a specialist.

Similarly to an HMO network there is no coverage outside of the providers that are considered to be in network by the plan.

These plans can often offer discounts to the PPO, POS, and HMO networks when it comes to monthly premiums which can be advantageous for those that do not need coverage from out of network providers.

While many view the premium savings as a welcomed advantage, we often recommend that EPO plans be used in combination with PPO and POS plans in company offerings so that employees who may need an out of network provider option and employees who prefer the lowest premium can both have a plan that may closely fit their needs.

About the Author

Employer of Record for International Employees - Explainer Video

Wed, 14 Jun 2023 18:44:37 GMT

The Advantages of Employer of Record

Marti Del Negro, the Senior Director for International Development at Global Expansion and EOR Advisory goes into details on how companies can utilize Employment of Record Services to expand their workforce by utilizing employees internationally.

As technology continues to evolve and employers become more well versed at leveraging employees ability to work nearly anywhere in the world we are seeing more employers expand their talent acquisition searches to include an international workforce. While companies can certainly manage international employees in house, solutions like partnering with an Employer or Record company can help them limit their risk.

Employer or Record (EOR) providers allow companies to partner with them to outsource their compliance and liability risks.

The Role of the Employer of Record

The EOR is tasked with the administration and guidance surrounding the complexities of navigating international guidelines such in areas that include:

Labor Laws

Taxes

Employee Benefits

Entity Establishment

Cost Savings

The EOR essentially provides access to an international Human Resources Department that can educate and simplify your needs.

For those that are unable to watch the video here is a transcript that is approximately a 4 minute read:

I'm Marti Del Negro, the Senior Director for International Development here at Global Expansion and EOR Advisory.

Now, you may have heard the term EOR, but what does it mean and how does it work? We'll take a look at that and some common use cases.

EOR simply means employer of record, and it's an employment practice that allows a company to hire an employee in any country around the world legally and compliantly, even when they don't have an entity established there.

It's been around for almost 70 years, but it's really taken off since COVID when the whole world started working from home. Lots of new companies have entered the space, and global employment is no joke.

You'll want to do your due diligence when selecting a partner, but we'll talk about that separately. For now, let's look at the practice.

EOR is really co employment. So the EOR owns all functions related to HR, legal tax and payroll.

They're managing the employment contract onboarding and offboarding, payroll tax remittance, benefit coordination.

But the company is really having that day to day engagement and management of the employee.

They determine workload work hours. They'll do performance appraisals and approve leave and expense reimbursement.

They're in charge of compensation and all decisions around dismissal, if appropriate. Now, there's a few different ways we see it used most commonly today, and the first is in talent attraction or retention.

The US. Labor market is just tight right now, and critical roles are going either unfilled or it's taken a really long time to find the right talent.

EOR gives a company access to the entire global talent pool, so they no longer have to settle for someone who is maybe not the best fit.

Just because they're local, they can hire the actual right person for the job.

We're also seeing more companies have employees come to them saying, I want to go live abroad for a year.

If an employee is a valued one, then EOR gives a company the ability to let their employees move abroad. It helps increase their engagement and helps with retention.

We also see it used a lot for cost reduction.

The reality is just nondomestic talent is oftentimes much less expensive.

Within that talent pool you have highly educated, fluent, English speaking workers who are very motivated to work and are willing to work a US. time schedule.

The last thing that we see a lot lately is in market entry or expansion.

If a company wants to try on a new market, they don't have to establish an entity and waste the time and resources.

EOR allows you to enter the market, employ there immediately, and try it on, see if it's a good fit. If not, you quickly and easily and with very little cost can exit the market.

So it's easy entry, easy exit, or you may find that there is a country that the company should be in and you know it EOR gives you an interim solution as the entity is being established.

Because in many countries around the world, that could take six, nine and twelve months.

EOR allows you to hire immediately begin taking advantage of working in that market. And then when the entity is established, you simply transfer the employees over so that's you are in a nutshell.

I hope this is helpful for you, and if I can ever answer any questions for you, please do reach out.

About the Author

A Comprehensive Guide to Outsourced Human Resources

roloson.michael@gmail.com (Michael Roloson) — Tue, 17 Jan 2023 04:15:15 GMT

Exploring The Landscape of HR Outsourcing

Human resources (HR) plays a vital role in the success of any organization. It is responsible for attracting, retaining, and developing top talent, as well as managing employee relations and benefits. However, HR can be a time-consuming and complex task, especially for small and medium-sized businesses that may not have the resources or expertise to handle it in-house. This is where HR outsourcing comes in.

Outsourced human resources, also known as HR outsourcing, refers to the practice of hiring a third-party company to handle HR functions for an organization. This can include tasks such as payroll, benefits administration, recruiting, compliance, risk management and training. HR outsourcing is often used by companies to save time and money, as it allows them to focus on their core business activities while outsourcing non-core functions to a specialized provider. In this article, we will explore what outsourced human resources is, which HR services can be outsourced, why companies choose to outsource HR services, and some of the more common ways that companies outsource human resources. We will also identify some of the more well known provider/vendor options for HR outsourcing and how they differ from one another.

What HR Services Can Be Outsourced?

HR outsourcing can encompass a wide range of HR functions, including:

Payroll: One of the most common outsourced actions is payroll and with some solutions such as PEO (Professional Employer Organization) offerings it is mandatory. Payroll provider services range drastically from the simple tasks as calculating employee pay, withholding and paying taxes, and issuing paychecks or direct deposits all the way to more expansive offerings such as job costing, time clock and PTO management, and tip credits.

Benefits administration: This includes tasks such as enrolling employees in benefits plans, managing changes to benefits plans, COBRA administration, answering employee questions about benefits that available to them, and health advocacy programs that help negotiate medical billing discrepancies.

Recruiting: The most common recruiting services include highlights such as posting job openings, reviewing resumes, applicant tracking software, and conducting interviews.

Training: This includes tasks such as developing and delivering training programs for employees. These programs often include content libraries that can be accessed at any time in addition to webinar and live trainings.

Performance management: As remote work becomes increasingly popular, so has the implementation of performance management software. From setting performance goals, conducting performance reviews, and providing feedback to employees this service makes things easier for management to highlight the successes of their employees and identify areas to invest resources for improvement.

Employee relations: This includes tasks such as handling employee complaints and grievances, mediating conflicts, and enforcing company policies.

Compliance: One of the more important but often overlooked aspects or HR outsourcing, compliance management helps ensure that the organization is in compliance with labor laws and regulations, and handling any related paperwork for those processes.

Co-employment Services: Through Professional Employer Organizations or PEO’s and Employer of Record (EOR) providers companies can partner with third parties to mutually employ their employees. This can allow their employees to have access to the third parties Workers Comp Insurance, Medical Insurance, and other Employee Benefit programs. It can also allow the company to offload many of the human capital management liabilities by shifting them to the PEO or EOR provider.

Why Companies Choose to Outsource HR Services

There are several reasons why companies choose to outsource HR services:

Cost savings: HR outsourcing can save companies money by allowing them to outsource non-core functions to a specialized provider, which may be able to perform the tasks more efficiently and at a lower cost. This is especially true for small and medium-sized businesses, which may not have the resources to hire and train entire teams of in-house HR staff.

Access to expertise: HR outsourcing can give companies access to a wider pool of talent and expertise, as well as to the latest HR best practices and technologies. This value becomes even more important for companies that do not have an HR department or that have limited HR experience. It is important to ask questions about the qualifications and structures of the individuals that you will have access to as they vary greatly. Some solutions provide access to technology that acts as a guide to help you understand how to complete HR tasks without having to do any research. Others provide a call center style solution where you will be able to call through a phone tree to be connected to an HR Professional. The highest level of service provides you with a dedicated support team that you work with directly. In this format your support team is able to develop a relationship with your business and have a better feel of your company culture and goals when providing assistance. There are also varying levels of expertise to consider when researching your options. Some vendors provide minimum criteria for HR support professionals such as a limited amount of experience, varying levels of certifications, or even HR Attorneys who can offer legal advice when needed.

Time savings: HR outsourcing can save companies time by allowing them to focus on their core business activities while outsourcing non-core functions to a specialized provider. For companies that do not have the time or resources to handle HR functions in-house, outsourcing HR is an invaluable solution that can expedite growth and increase margins. For those with HR teams, outsourcing some aspects of their HR needs allows that team to focus more on making an impact for the company as opposed to being bogged down by some of the more tedious and time consuming administrative burdens that accompany the Human Resources field.

Flexibility: HR outsourcing can provide companies with greater flexibility, as they can scale up or down their HR services as needed. For those companies that experience fluctuations in their workforce or that have seasonal or project-based staffing needs it is important for them to have contracts in place with their vendors that allow them a pricing model that favorable addresses these changes throughout the year.

Risk management: HR outsourcing can help companies to mitigate risk by ensuring that HR functions are handled correctly and in compliance with labor laws and regulations. While labor laws and compliance were already increasing in complexity throughout the early 2000’s, the regulations and constant changes brought on as responses to Covid 19 beginning in 2020 has seemingly placed all companies into a scenario where they are subject to complex or constantly changing HR regulations.

How to Outsource Human Resources

If you are considering outsourcing HR services, here are some steps to follow:

Identify your HR needs: Consider which HR functions you want to outsource and why. This will help you to determine which providers to consider and what to look for in a provider.

Research providers: Look for HR outsourcing providers that specialize in the functions you want to outsource and that have a proven track record of success. It is important to factor in what your needs are currently and what they will also be in the future to minimize disruption and put in place strategies that create clear long term pathways. Leveraging the resources of HR Outsourcing Consulting firms like PEO Focus is a great way to get ahead of the process and bring an expert on to your team to improve the search.

Evaluate providers: Consider factors such as cost, expertise, and customer service when evaluating potential providers. This involves requesting proposals, references, and demos to get a feel for how each partner varies their solutions and which ones are a better fit for your organization.

Negotiate terms: While vendors may try to be rigid on most terms the truth is they can be very flexible, they just don’t like to be. This is one of the most overlooked facets of partnering with Outsourced HR providers. Nearly all parts of the terms of the outsourcing agreement, including the scope of services, fees, and any other terms and conditions are completely open for negotiation. The PEO Focus team works hand in hand with yours to ensure that the agreement is fair and mutually beneficial.

Implement the outsourcing agreement: Work with the provider to implement the outsourcing agreement, including any necessary training or transition periods. This may involve transferring data or other assets to the provider, as well as communicating the changes to employees. The implementation period is unfortunately the area where the most problems are likely to occur with your new HR partner. Laying down a clear timeline of dates and expectations can go a long way towards minimizing mistakes and frustrations involved with the implementation process.

Which Providers Are Considered the best for HR Outsourcing?

There are many providers that offer HR outsourcing services and ultimately the best partners for you may not be the best for someone else. It is important to find the vendors that best suit your needs and depending on your business current situation and goals for the future this could mean partnering with a company that is extremely well known or identifying a smaller provider that’s business model lines up more closely with that of your own. With that said, some of the providers out there for different HR Outsourcing Solutions:

Payroll: Payroll is no longer just payroll. As technology continues to make advances annually, payroll providers now offer a wide range of offerings in addition to payroll such as benefits administration, recruiting, workforce management, some HR consulting, expense management and training. While nearly everyone has heard of ADP and Paychex, there are many providers out there such as isolved, Paylocity, Paycor, Netchex, and others who offer thorough and flexible solutions for their clients.

Professional Employer Organization (PEO): PEOs work by entering into a co-employment relationship with their clients. In this arrangement, the PEO becomes the employer of record for tax and employee benefit purposes, while the client remains responsible for managing the day-to-day operations of the business. This allows the client to outsource HR functions to the PEO while retaining control over their business. Publicly traded companies in the PEO space include Insperity, ADP TotalSource, Paychex and TriNet while the private sector includes names like Questco, Vensure, EngageHR, CoAdvantage, Justworks and others. With over 700 different PEO organizations providing services it is important to go through a careful vetting process when identifying which group is the right fit to partner with.

Benefit Third Party Administrators (TPA’s): Benefits administration providers are companies that specialize in managing employee benefits programs, such as health insurance, retirement plans , and employee assistance programs. Some of the well known names in this space include Mercer, Aetna , United Healthcare , Cigna , UMR, Sedgwick and TrustMark.

Recruiting Providers: Recruiting providers are companies that specialize in helping businesses to find and hire top talent. Recruiting providers may handle tasks such as posting job openings, reviewing resumes, and conducting interviews. The top recruiting firms tend to be very vertical focused to leverage their contacts and pool of talent more efficiently. Firms like Robert Half, Korn Ferry , Randstad and Lucas Group are some names that have set themselves apart in the space.

When selecting an HR outsourcing provider, it is important to consider which provider is the best fit for your organization's needs and budget. Some providers may be more suitable for small businesses, while others may be better suited for large organizations. Some providers may specialize in certain industries or HR functions, while others may offer a more comprehensive range of services. It is also important to consider factors such as customer service, reputation, and flexibility when evaluating different providers.

Wrapping up our Discussion on HR Outsourcing

HR outsourcing can be a valuable option for companies looking to save time and money, access expertise, and improve HR processes. When outsourcing HR functions to a specialized provider, companies can focus on their core business activities while ensuring that HR functions are handled correctly and in compliance with labor laws and regulations.

By following the steps outlined above and considering the most popular providers, companies can effectively outsource HR services and achieve their HR goals.

For more information or assistance in navigating the complexities of an HR Outsourcing search you can call the PEO Focus team at 888-991-7367 or email us at info@peofocus.com with any questions.

About the Author

Are Business Owners Eligible to Participate in HSA and FSA Accounts?

Wed, 04 Jan 2023 03:07:18 GMT

A Deeper Dive Into how Business Owners Can Participate in

HSA and FSA Tax Advantaged Accounts

As a business owner, you have many responsibilities when it comes to managing your finances and ensuring the success of your company. One aspect of this is handling contributions to your Health Savings Account (HSA) and Flexible Spending Account (FSA). These accounts can be a useful way to save money on healthcare costs and other expenses, but it's important to understand how they work and how to properly manage them.

First, let's take a look at what HSAs and FSAs are and how they differ. A Health Savings Account is a tax-advantaged account that is used to pay for qualified medical expenses. It is typically paired with a high-deductible health plan, and the funds in the account can be used to pay for out-of-pocket expenses such as deductibles, copays, and prescriptions.

On the other hand, a Flexible Spending Account is also a tax-advantaged account that can be used to pay for qualified medical and dependent care expenses. Unlike an HSA, which is tied to a specific health plan, an FSA is usually offered as a benefit through an employer and can be used to pay for a wide range of expenses including healthcare, dental, & vision treatment costs.

Now that we have a basic understanding of these accounts, let's look at how business owners can handle contributions for themselves.

If you are a business owner and have a high-deductible health plan, you may be eligible to open an HSA. To contribute to an HSA, you will need to establish the account with a financial institution and then make contributions throughout the year. Contributions to an HSA are tax-deductible, which can help to lower your overall tax bill.

As a business owner, you have the option to contribute to your own HSA either through payroll deductions or by making contributions directly to the account.

If you choose to contribute through payroll deductions, owners will most likely need to make these contributions post tax as opposed to pre-tax.

Owners who need to make contributions post tax include:

Members of a Limited Liability Company, or LLC
Partners in a partnership
2% or greater owners of a Subchapter S corporation

These restrictions also apply to FSA accounts and are put in place by the IRS to prevent someone from receiving the favorable tax treatment twice for the same person being once via the business and then secondly from the owner.

Keep in mind that there are annual contribution limits for HSAs, so be sure to check with the Internal Revenue Service (IRS) to determine the maximum amount you can contribute each year.

2025 HSA and FSA Contribution Limits

If you offer an FSA as a benefit to your employees, you may also be eligible to participate in the plan yourself. To contribute to an FSA, you will need to enroll in the plan and then make contributions throughout the year. Like an HSA, contributions to an FSA are tax-deductible and can help to lower your overall tax bill.

One important thing to keep in mind with FSAs is that they are typically "use-it-or-lose-it" plans, which means that any funds that are not used by the end of the plan year will be forfeited. This means that it's important to carefully plan your contributions to ensure that you are able to fully utilize the funds in your account.

In summary, as a business owner, you have the option to contribute to an HSA or an FSA to help pay for qualified medical and dependent care expenses. Contributions to these accounts are tax-deductible, which can help to lower your overall tax bill. It's important to understand the rules and regulations surrounding these accounts and to carefully plan your contributions to ensure that you are able to fully utilize the funds in your account.

FAQs surrounding HSA and FSA Contributions for Business Owners:

What restrictions do these owners face with respect to the employer contributions?

The business can’t give owners a tax-free contribution. Any contributions to these owners’ accounts from the business are considered taxable income to the owner (and tax-deductible to the business as a compensation expense).

Can these businesses make tax-free contributions to employees’ HSAs?

Yes. The restrictions are placed on contributions to owners, not employees. These businesses can make tax-free contributions to their employees’ HSAs.

What restrictions do these owners face on personal contributions?

They’re eligible to participate in a Cafeteria Plan, the vehicle that allows individuals to receive a portion of their total compensation in the form of untaxed benefits. Thus, these owners can’t make pre-tax contributions to their HSAs.

Can these owners make post-tax payroll contributions to their HSAs?

Yes. They can contribute up to the maximum contribution allowed by law. Post-tax payroll deductions or drafts from a personal account are convenient means of contributing regularly to an HSA.

Do they lose tax advantages of HSA contributions because they can’t make pre-tax payroll contributions?

No. These owners can make personal post-tax contributions and then deduct those contributions on their personal income tax return (Form 1040) - even if they don’t itemize other deductions. In doing so, they recoup the federal and state (if applicable) income taxes paid on those funds.

Click here for information regarding 2025 HSA and FSA Limits

Director of PEO Focus Inc on WSIC Radio Show Local Biz Now

Tue, 09 Aug 2022 18:06:05 GMT

Video: Covids Impact in the Work Place

WSIC Radio show host Joe Vagnone invites small business maestro Sherre DeMao of BizGrowth Inc and Michael Roloson of HR Outsourcing and Benefits Consulting Firm PEO Focus to discuss Sherre's latest article The New Workforce Paradigm: Covid's Aftermath .

The landscape is shifting and both employers and employees are trying to identify what an ideal work environment should look like moving forward. As technology progresses we see that labor laws, work life balance, and efficiency in the work place are just some of the factors that are being considered in identifying the future of the employee and employer relationship.

Topics in the episode include the Hybrid model, the challenges that HR Departments are facing, the difference between working remotely and working from home, and more.

To listen to more episodes of the Local Biz Now show you can visit WSIC News .

To connect with the participants on LinkedIn:

Michael Roloson , Dir ector of PEO Focus Inc

Sherre DeMao - Founder of BizGrowth Inc

Joe Vagnone - Business Broker and Host of Local Biz Now Radio Show

PEO Focus Named Among Top Professional Employer Organization Consulting Firms for 2022

Mon, 14 Mar 2022 17:23:08 GMT

PEO Focus Named Among Top PEO Firms 2022

Here at PEO Focus, we provide our partners with the advantages they need to achieve modern business success. As a Consulting Firm that focuses on Human Resources Outsourcing and Professional Employer Organizations we guide our clients through their business obstacles with ease and confidence.

By educating our clients and creating a transparent process, we put them in a position to make the choices that will provide the most value to their business and employees. We consult on all matters of PEO from identifying which groups provide the best fit to helping you transition from them when your business takes the next step and everything in between.

We take pride in our ability to build meaningful relationships with our clients. As such, we’re honored to be recognized by Clutch as one of the leading PEO firms in 2022!

Through our service offering our clients save both time and money when searching for the vendors and providers that can make the impact they need. Our expertise allows you to make decisions with confidence and focus more energy on other areas of need.

We’re truly enamored with the praise that we’ve received, and it’s all thanks to our partners that we’re on Clutch’s radar among the leading companies for this year!

“We are honored to be recognized by Clutch as one of the leading B2B PEO Consulting Firms. The team at PEO Focus is dedicated to helping our clients find the right HR and Employee Benefits solutions for their group. We look forward to adding much-needed transparency to PEO and ASO partnerships throughout 2022 and beyond.”

— Tom Engasser, PEO Focus

Interested in our Professional Employer Organization Consulting services? Connect with us today to discover how we can help you!

Is 2021 the Year of the Resignation?

Fri, 22 Oct 2021 15:12:01 GMT

What Does the Great Resignation Really Mean?

If you have not already noticed that more people are leaving their jobs than usual, you likely will soon. In April alone over 4 million workers got up and quit. Now there a number of factors this can be attributed to, most of them stemming from Covid related reasons. It may be that some people are realizing in this pandemic that their life is more finite than they thought so they would rather pursue what is really important to them or it may just be that people are looking to change after so much time in lockdown.

The "Gig Economy" is certainly having an impact but it is important to note that in 2020 a record number of small businesses were created. As technology improves it is possible that companies will not only compteting with each other to attract top talent, but also with a candidate who weighs the freedoms of being self employed with the advantages of being an employee.

Microsoft recently released its annual work trend study where they surveyed over 160,000 employees from countries all over the world to find out exactly what they think about their jobs, workplace, and leadership. The study certainly had some interesting findings, including that nearly 40% of all workers are currently considering quitting their job. This statistic may sound freighting, markedly so. If 40% of the workforce was to up and leave their jobs tomorrow there would be some serious repercussions for business owners and employees alike. So why should you not be worried?

Why You Shouldn't Be Too Worried

40% of people quitting their jobs is unrealistic and here is why. This statistic was derived from an anonymous survey which only asked, “would you consider leaving your job in the next 12 months”. A lot can change in a year whether it be in respect to relationships, finance, or health. All these somewhat unpredictable factors can severely influence someone’s decision to leave a job in the next 12 months. Knowing what the statistic is based on makes it seem a lot more realistic that 40% of people selected yes. News media outlets have largely sensationalized this number, but that doesn’t mean you shouldn’t be worry free.

Compared to last year or even the year before the 4 million people resigning in a single month isn’t too surprising. What is surprising is that this number is almost double what it was a decade ago despite the total amount of employed people largely remaining the same.

The game has changed. Employees are leaving their jobs not only to find either more accommodating or better paying jobs elsewhere, but also for a culture fit and expanded employee benefit s . Retaining top talent is harder than ever and employees have accepted that loyalty is not valued highly in the current market. This means that businesses now more than ever need to focus on retaining their top employees to stay competitive.

Studies from Harvard Business Revie w indicate that when promotions are managed effectively employee turnover rates are cut in half compared to others in the same industry. Other metrics from productivity to innovation also see significant improvement when promotions are handled properly in a company. It’s clear that showing your employees that they are valued matters, but for many they will want to know that there is a clear path for advancement and taking on more responsibility. For those looking for long term fits in their current roles they want to know the company is putting them in a position to have a secure retirement, freedom to enjoy time outside of work, and a rich benefits plan. Employees now more than ever are prepared to leave their jobs if they don’t find that is the case. All that means is even higher expenses for businesses trying to make up for lost talent.

What Businesses Can Do To Protect Themselves

The answer to this question is fairly simple. Companies need to decide where they can make the adjustments their employees are coveting as well as get feedback from candidates they are pursuing. This will allow them to uncover what benefits and culture adjustments their employees value most. It might provide a slightly higher upfront cost to implement changes or increase employee benefit offerings but taking these precautions could save multiple times the amount invested due to lower turnover and higher productivity.

Providing employees with a more flexible work life balance combined with higher pay will earn their respect making them even more loyal to your business. Some of the benefits employees are coveting the most currently are Flexible Time Off , Remote Work when it is feasible, Group Health Insurance , Retirement Plans , and Defined Paths to Career Advancement.

Big companies like Goldman Sachs are already taking steps in this direction along with attempts to reduce hours worked by employees. Industry leaders are setting the pace. It’s time to act before being left behind.

Involve Your Team

As you can see there are a lot of moving parts. This is why I recommend having at least two people on your leadership team on this project. From my experience too many important details fall through the cracks when one person is left to juggle all aspects of the evaluation.

It’s also smart to involve a trusted business advisor which might be a strategic financial consultant, a business consultant, your health insurance broker or a PEO Consultant .

About the Author:

United HealthCare partners with Peloton to Improve Access to Fitness & Wellness

Tue, 20 Jul 2021 17:41:54 GMT

UHC Members to Receive Peloton Membership

United Healthcare is partnering with Peloton in an effort to improve access to increased fitness and wellness for their qualifying members.

Beginning on September 1, 2021, all eligible fully insured UnitedHealthcare members will gain access to a new wellness offering that will provide up to 12 months of the Peloton Digital Membership at no additional cost.

Most fully insured members that have access to myuhc.com will be eligible for the Peloton Digital Membership offer.

If more information is requested please reach out to the PEO Focus Team at 888-991-7367 or info@peofocus.com

Health Insurance Options Within a PEO

Sat, 10 Apr 2021 13:32:02 GMT

Before you actually start and begin operating your own business, you may grow bubbly about the whole idea of being your own boss. However, once you actually start managing your company, you see that it is hard work. In most cases, it is much harder than people anticipate.

The stress and complications associated with operating your own business are why business owners often end up outsourcing tasks to other businesses to help them manage their employees. One way to ensure you have loyal employees is by offering them reasonable compensation and benefits.

A PEO is one way that businesses outsource management responsibilities. A PEO can help you not only manage your employees but can also help you acquire benefits for your employees. So instead of multitasking and wearing multiple hats, you as the business owner can pass that responsibility to your outsourced partner.

When your employees are not stressing about all sorts of benefit questions like if their car insurance can cover medical bills or if they have to pay for their own retirement, they will be more focused on work — which results in better quality results from them.

What is a PEO?

PEO stands for Professional Employer Organization , and it is a company that builds a partnership with smaller companies. These organizations are able to partner with small businesses easily because smaller businesses generally need help with human resources and benefits tasks.

The PEO lends its Federal Employer Identification Number (FEIN) to the small business and its employees. At a federal level the PEO shares responsibility as the employer of record and assists with all matters of HR and compliance for all of the employees.

Despite the fact that on paper it looks like the PEO and small business are partners, the PEO is in fact a client.

Once the PEO is hired, it then manages the employee handbook, the employee’s benefits, and the day-to-day human resources tasks. This helps small business owners better run the business and also removes some of the risk and liability associated with managing employees.

Small Business Owners Benefit from Using a PEO

Although it may seem counterintuitive, there are different benefits that come when using a PEO. For example, small business owners can save money when they partner with a PEO by leveraging their economies of scale for Employee Benefit Solutions and either outsourcing their Human Resources needs or providing their HR Team with time efficient tools to be more productive.

Aside from saving money, they are able to more easily stay in compliance with human resources labor laws. If a small business is not equipped to manage all of these laws, they can be charged fees from the state find themselves paying backdated penalties for compliance violations they were not aware of.

Gaining Access to More Health Insurance Options

When you partner with a PEO, you have access to its health insurance carriers. This means you have a bigger variety of options that are better than what you would be presented with as just a small business owner.

The PEO selects a carrier that carries multiple plan designs so there is an advantage of determining between competitive health insurance plans. Beyond the option of multiple plans, PEOs can also dip their hands into more products associated with health insurance plans like Health Advocacy Programs and Free Virtual Doctor Visit options.

If you partner with a PEO, you as the business owner would be able to provide better insurance plan options to your employees which in turn can attract more experienced workers to your company since you have better health insurance plans.

A PEO Handles Health Insurance Administration

There is a lot of stress associated with dealing with health insurance companies’ representatives. As a small business owner, you may have to jump through various hoops in order to be offered a decent insurance plan. However, with a PEO, you do not have to worry about this because they will manage dealing with all the complicated red-tape for you and your employees.

The PEO will find you better insurance plans and manage the health insurance cost and administration within your company. They will also handle distributing the plan options to the employees.

The ball is completely in their court which alleviates a lot of stress for you as the business owner.

A PEO Manages the Insurance Carrier Partnership

As mentioned above, the PEO handles everything with your employees. They will manage insurance renewals, open enrollment, and onboarding. When employees need help understanding the insurance coverage, the PEO will educate them and even advocate for them when there is an active claim.

You will more than likely never have to communicate with your insurance carriers because the PEO will facilitate all required communication between your business and the carrier.

A PEO Helps with Planning and Organizing Annual Changes

There is so much uncertainty about almost everything amidst the pandemic and people are wondering how COVID-19 will impact health insurance rates since open enrollment is around the corner.

Well, you do not have to stress about these concerns when you hire a PEO because they organize and plan everything, including the annual changes. Navigating HR complexities is the biggest reason why most PEOs are hired, so they are well equipped in handling any and all concerns with annual changes.

From PPP programs to helping you understand your options with changes in labor laws at state and federal levels, the PEO makes sure you are well prepared to make the right decisions.

Having a PEO Helps Employees be More Satisfied

The benefits that PEOs are able to offer small business owners are many of the things that millennials look for in the workplac e . Employees are essential to the survival of any business, so it is in the employers’ best interest to keep them happy.

According to a 2018 survey conducted by Mercer , 76 percent of employees explained that they are seeking employment elsewhere because they do not feel valued at the workplace. One obvious way to keep your employees feeling valued is by offering great benefits.

In todays environment, salary is not the only factor that employees consider when choosing an employer. Only 12 percent of the employees stated that they would leave their company because they want more money. Employee Benefit s have come to play a vital role in an employees overall satisfaction and cultural feel of the work place.

Mostly, though, people want to work for someone who is empathetic and caring. Having a PEO allows small business owners to better invest in their employees which provides a better work environment for everyone.

Hiring a PEO brings added value to the livelihood of businesses’ employees via higher quality insurance benefits. Health insurance is one of the most important benefits to employees, so partnering with a PEO helps create a positive culture of loyal employees and business owners.

PEO Focus Named Among Top PEO Broker and HR Consulting Firms for 2021

Wed, 10 Mar 2021 21:11:12 GMT

PEO Focus Named Among Top PEO Firms 2021

Update - We are pleased to announce we have won the award for Top PEO Firms for 2022!

At PEO Focus, we guide our clients in making the PEO search and partner process more transparent. We consult on all matters of PEO including search, transition, extraction, and negotiation .

With our services, our clients save both time and money by helping them easily compare vendors and providers. Our expertise is in evaluating your needs and narrowing down the search process to those who provide you the most value for the long term.

PEO Focus allows you to focus on your business while we work on providing you with the solutions that best fit your needs.

“We did not have to put our time in shopping and negotiating with each PEO but instead to look at the information nicely compared together.” – Support Manager, Online Floor Retailer

That’s just one of the reviews you can read on our Clutch profile .

Are you interested in our services? Send us a message , we’re here to help!

PrismHr Security Incident Explained

Thu, 04 Mar 2021 23:16:25 GMT

What Exactly Happened To PrismHR?

PrismHR is a leading provider of software and HR services to Professional Employer Organizations (PEO) to help them manage Payroll, Employee Benefits , and other compliance related functions.

On Sunday evening PrismHR identified suspicious activity on their servers that impacted both their payroll and benefits technology platforms. They immediately implemented security measures and shut down access by all parties to their system in an effort to identify the threat, protect data, and strengthen the security of their system.

This caused disruption to many of the PEO and payroll companies that utilize the PrismHR software. They were unable to access the system to process any payroll needs and sent many scrambling to look for temporary solutions.

Who Was Impacted by the PrismHR Security Threat?

While many PEO's were impacted by this threat, not all were, including some who partner with PrismHR.

Those who utilize PrismHR as a cloud based provider no longer had access to their system. For Employers and Employees who were partnered with PEO's with this type of relationship, they too were completely blocked from even viewing data. Employees were unable to access pay information, Employers were unable to onboard new hires through the software or upload any payroll data for the upcoming payroll period.

PEO's who partner with PrismHR but host the software on their platforms were not impacted by this security threat and they were able to continue on with business as usual. Groups like Engage PEO fall into this category and their clients experienced no interruption in service.

For PEO's like FrankCrum and CoAdvantage that run their own proprietary software, they were never in any danger and had no exposure to the threat.

What About Data Housed on PrismHR?

PrismHR released a statement on March 3rd 2021 that in part read:

"Although our investigation is still ongoing, we can report that there is currently no evidence of unauthorized access, misuse or theft of data contained on its servers."

At this time they appear confident that the security measure they had in place worked effectively and no company or employee data has been compromised. In addition to their own internal teams PrismHR brought in an outside Cyber Security firm to assure them of all risks and identify when it was safe to bring systems back online.

When Will Systems Be Back Up and Running?

All signs point to most PEO's having their systems back up and running by March 5th. For groups that had to estimate payroll, reconciliation will be happening immediately to impact as few people as possible. For those that did not have a payroll run needed for this Friday, it is most likely that they will not have any interruptions in regards to running their next payroll.

Should Employees Take Any Action?

While PrismHR is communicating that there has not currently been any evidence of data loss or theft, it is always a best practice as an additional safety measure to change passwords.

Anyone with data connected to or housed by PrismHr can take the precautionary measure of changing their password in an attempt to further protect their information.

Where Can I Get Updates or More Information?

The PEO Consulting team at PEO Focus is available to answer any additional questions you may have and help you understand what options you have in making sure your data is protected. You can call at 1-888-991-7367 or email at info@peofocus.com

In addition you can read more here at the Wall Street Journal on a piece sourced by PEO Focus Director Michael Roloson .

About the Authors:

Exploring Cyber Liability Coverage

Thu, 03 Dec 2020 16:49:05 GMT

D eep Dive into Cyber Liability Insurance

Jimmy Cannizzaro from Fulcrum Risk Solutions outlines the coverages provided by Cyber Liability Insurance and the growing complexities that surround companies when it comes to protecting their data.

From Data Breaches, Intellectual Property Rights, Extortion and Business Interruption it is important to know how your business can be protected from outside threats.

While we often think of protecting our own data, Jimmy outlines how it is just as important to identify risks and liability associated with the data of third party partners.

Cyber Insurance solution guidelines vary by state and become more intensive when having employees and clients across multiple states.

Whether your HR solution is with a PEO or ASO or is an unbundled solution for payroll, employee benefits , and risk management it will be increasingly important as we continue to grow in the age of technology to be protected when it comes to our data and the data of our partners.

Be sure to contact us at info@peofocus.com if you have any questions or concerns regarding Cyber Liability and solutions to help mitigate your risk.

Can Same Day Pay Reduce Employee Stress in Aftermath of Covid-19?

Fri, 13 Nov 2020 22:05:35 GMT

Retaining Employees in a New Environment

It must be said that the companies that survived the economic shutdown instigated by the 2020 Covid-19 pandemic deserve many accolades. Week after week brought new reports of businesses of every sort permanently or temporarily shutting down operations. Now, as the strictures of the pandemic are easing and companies are doing their best to get back to pre-pandemic operating levels, new challenges are emerging.

One of the more difficult issues facing employers is hanging on to the excellent workers they brought in to help build the success of the company. The uncertainties and financial hardships brought on by the pandemic caused emotional and economic ripples throughout the workforce and their families. For some employees it brought about uncertainty, particularly when it comes to job security and financial well-being.

This has left businesses looking for new solutions and benefits that may be available to improve their employees lives both in and out of work.

This article will discuss some of the sources of employee anxiety and list several strategies employers can use to connect with their workers. It will also explore an emerging financial perk employers are beginning to offer employees that greatly diminishes employees financial anxiety while costing the company nothing.

What Stresses Out Employees?

Under the best of circumstances, employees may experience anxiety for any number of reasons. Unfortunately, the pandemic has brought a lot of stress into households from a variety of different directions. The unavoidable, unpredictable economic slowdown instigated by the Covid-19 pandemic created havoc for businesses on a global scale and also resulted in a lot of heartache for individual workers. Continual, pervasive uncertainty was the hallmark of of every workplace throughout the year. The resumption of work, to the extent work did resume, did little to calm the worries of American workers.

How Employers Can Promote Employee Loyalty

New Tool Eases Employee's Financial Concerns

The movement for providing on-demand pay as a convenience for employees is quite new but is rapidly gaining steam. The benefits for employees are obvious as on-demand earnings will remove incentives for employees to raid their savings or turn to high cost options such as payday lenders. On-demand pay provides employees with access to their cash when they need it the most all from the convenience of their smart phones or tablets.

Beyond the benefits for employees, there are also distinct benefits to employers as well.

Researchers have theorized that this new program will increase productivity and cut down absences, in part because it greatly diminishes the financial stress placed on employees. It's helpful to businesses in recruiting because not all companies offer this to their workers yet. It has been shown to take the feeling of crisis out of critical situations because employees know where they can turn for emergency funding without pleading with the boss for help. All of these factors reveal that this on-demand pay program provides a real boon to employee retention.

Investigating and Identifying Options for On-Demand Pay

Before employees can download an on-demand payroll app, they must have the permission of their employer. This means it is incumbent upon you to investigate this new way of distributing on-demand earnings.

It is always important to investigate different options that may be available to you to understand which provider may be the best fit for your group. While there are providers for larger companies like DailyPay and smaller companies like ZayZoon, we feel that Tapchec k has an offering that fits well from startups to enterprise sized companies.

You will want to consider costs to employees, the employer, how funds can be accessed, how frequently they can be accessed, and whether or not the risk is placed on the provider or the employer for advanced funds.

Regardless of which option is best for you, your employees will be grateful for the option as this new employee benefit gains more momentum over the years to come.

Differences Between an ASO and PEO Solution

Sat, 12 Sep 2020 19:31:43 GMT

Once a business begins to expand, the owners have to find a way to manage and smoothly operate all of the processes associated with their business. If you’re a business owner, you may feel discouraged in the face of this daunting task. This task can be complicated and managing them all on your own can be time-consuming, if not impossible.

As the business owner recognizes that their company has grown too large to manage on their own, they begin to hire and outsource agencies to manage the employers and the logistics of the business.

There may even be a full-on expansion where a Human Resources (HR) department is added. In these instances, business owners no longer have to answer questions like, “ does workers comp cover pain and suffering? ” and can instead redirect such inquiries to an HR representative.

Eventually, outsourcing and creating a Human Resources department becomes a necessity since HR is essential to growing a business. The same goes with having to outsource agencies. The two common outsourcing alternatives that companies choose from are Professional Employer Organization (PEO) & Administrative Services Organization (ASO).

What is a PEO?

Those who are new to outsourcing for their business usually do not even know what a PEO is when they initially begin their search for help. So for starters, let’s break it down a bit.

PEO stands for Professional Employer Organization.

A PEO is a firm that works with employers and takes on shared responsibility for supervising employees. The PEO enters a co-employment relationship with the company and becomes the employer of record on paper for your employees.

The process of moving your employees under the management of the PEO consists of onboarding employees into the PEO's technology platform and completing an I9 process. The employees will move under the PEO’s federal employer identification number (FEIN) that allow them to take advantage of the benefits the PEO is able to offer as a larger entity.

Once the PEO has brought all of your employees onto the platform, they can now manage employee benefits , guidelines, policies, and assist with all matters surrounding compliance and human resources. They simplify the administrative pieces of HR and allow smaller companies to scale more easily. Other ways that a PEO can help business owners with their administrative duties include:

Workers Compensation
Risk Management
Human Resources Management
Compliance
Employee Health Insurance and Benefits Administration
Payroll and Tax Services
Alternate Dispute Resolution
Employer Liability Protection

What is Co-Employment?

Earlier in this article, we mentioned that a PEO agrees to take on responsibility for the company’s employee and goes into co-employment. But what is co-employment? Well, co-employment is a partnership between the PEO and an employer.

The two parties share the legal employer responsibilities of an employee. This arrangement creates a shared liability between the two, which helps protect small businesses during infringements and any suits from employees.

As a way to protect themselves from any potential legal conflicts with employees, the PEO usually takes control and changes their client’s employment tasks, administrative responsibilities, and employee handbook accordingly.

What is an ASO Solution?

An Administrative Services Organization (ASO) offers assistance with managing employees similarly to a PEO but can do so without entering into a Co-Employment relationship. The ASO still handles many of the same responsibilities from an HR standpoint that a PEO does but is unable to allow the clients employees access to their employee benefits.

This makes the biggest difference between an ASO and PEO that ASO’s do not enter into a co-employment relationship. The ASO does handle the company’s payroll and tax filings but still files under the company’s original FEIN number.

The ASO manages the daily aspects associated with running the company’s human resources department, and it also helps the company arrange and secure benefit packages for the employees however these packages are limited to what an organization is eligible for based on their business.

Many companies transition to an ASO model once they become larger in size and have over 100 employees participating in health insurance programs offered by the company.

Differences Between a PEO and ASO

When trying to decide between a PEO and an ASO, you have to decide which would be the right choice for your business. You have to understand the key differences between the two options, as well.

Choosing to outsource a Professional Employer Organization (PEO) allows you to participate in the employee benefit programs offered by the PEO. By using economies of scale and the co-employment relationship companies allow their employees to gain access to employee benefit programs that they would not qualify for on their own. This can often allow companies to offer employee packages that can attract quality employees at the top of the talent pool. This is the main difference between a PEO and an ASO because an Administrative Services Organization does not have a co-employment relationship that can afford companies access to these perks.

The ASO leaves the company with control over choosing the employee’s benefit plans which can be advantageous for larger groups. They still can get the HR guidance, tools, and compliance assistance while looking at the benefits of Self Insured Health Insurance plans.

Commonalities Between a PEO and ASO

The obvious similarities between a Professional Employer Organization (PEO) or Administrative Services Organization (ASO) are its administrative services. How ASO’s and PEO’s operate and help their clients are nearly identical when it comes to its administration assistance.

Both a PEO and an ASO oversees the day-to-day operations of the organization and its employees. For small businesses that have limited staff in the Human Resources department or want to free up the time for their HR staff to work on more impactful projects, both of these solutions formulate into the company’s overall business plan to ease the time spent on administrative duties.

These administrative roles expand to tax filing, employee benefits assistance, payroll, employee complaints and concerns, and any other topic associated with compliance and HR management.

Is PEO or ASO a Better fit for Your Business?

Deciding on a Professional Employer Organization (PEO) or Administrative Services Organization (ASO) depends solely on the basis of a company and what the company’s main goal is.

Some owners may benefit from the additional options that are opened up by partnering with a PEO. These will often center around health insurance programs and voluntary employee benefit programs.

Other owners may like the flexibility of an ASO model that pairs well with internal HR employees and the administration of their own health insurance programs.

Ultimately each businesses goals and needs vary so greatly, that each company needs to look at their current state and projected state over the coming years. By going through a deep analysis of their current situation they can then become educated about how both ASO and PEO solutions can make strong impacts on their operations and growth models.

About the Author

How To Evaluate PEO Options

Thu, 10 Sep 2020 18:01:48 GMT

Finding the Right PEO for You

If you’ve gone through the exercise of looking for the right PEO, you know it can be a daunting task. There are many tangible and non-tangible factors to consider. My goal is to give you a non-biased tool that will help you make a better decision on who you partner with. PEOs are not created equal. You’ll find a great deal of variety in the way PEOs structure, deliver and price their services. A Hyundai and a Mercedes are both cars, both get you to where you need to go but with a different experience. What you value depicts what you buy.

Align your Challenges with PEO Services

What does the company need? For example, let’s say your business is having a hard time accessing affordable health coverage for its employees because you have offices in several states. Here you’d want to ensure the PEO you choose could provide your employees access to a national healthcare provider at a competitive rate. Below is a checklist you might find helpful to assess what you need.

You Know What You Want, Now Narrow Your Options Down to 2 or 3 PEOS

1. Understand PEO Pricing

Many variables affect the cost of joining a PEO. Your company’s size, overall workers’ compensation risk and the Employee Benefit s offered to employees are all examples of components that contribute to cost. In addition, there can be differences in the way PEOs’ bill for their services. Some PEOs calculate their fee as a percentage of your payroll while others charge a flat fee per employee. With the payroll percentage fee structure, bonuses and commissions you award your employees may cause fluctuations in cost – you may pay more to the PEO in those weeks. With the flat, per-head fee structure, it doesn’t matter if an employee makes $30,000 or $1,000,000 annually – your PEO costs stay the same.

It is also important to consider and evaluate all costs associated with the PEO such as State Unemployment Taxes (SUTA), Section 125 Benefits, and other miscellaneous costs to see how they compare to alternative options. Not every PEO provides the same value or cost structure so understanding which PEO provides the services you value the most can create cost efficiency when deciding on which provider is best to partner with long term.

2. Evaluating Long Term PEO Costs

How does the PEO manage their health care costs long term? A good way to judge this is to ask for an average annual increase statement. A difference as low as 2-5% medical increase between either PEO could mean thousands of dollars. What may be an inexpensive PEO year one could be more expensive than a premier player year two. This will be easy for a publicly traded PEO as this is public record.

3. Looking at the Overall Value

Although cost is always a factor, picking the wrong provider could end up being an expensive mistake. What is the overall value being provided by each PEO and where will are business be over the next few years?

Do you plan on building an HR department in house? If so you likely won’t need a PEO with a robust HR offering. If you plan on outsourcing 100% of it or just having one HR person in-house, you might want a provider that offers more HR resources in addition to technology.

How much would improving employee productivity affect top and bottom line revenues? Are you prepared to handle it yourself or would it be easier to outsource most of this with or without an in house HR professional? Is Performance Management and Recruiting an important part of your growth model?

If you don’t have an HR person right now and don’t plan on getting one, will the HR Service Team provide adequate support? Are you looking for a PEO that is very high touch or one that is available when you reach out to them? How involved do you want them to be with employees both during on-boarding and as seasoned employees?

4. Meet the Service Team

While a PEO sales rep might be very knowledgeable, chances are he/she will not be your main point of contact. Be sure to meet the people you’d be working with. Find out things like:

Are they reactionary service or are they proactive with updated laws and regulations, handbooks, HR best practices, etc? How much work do they do? For example, some PEOs will create custom job descriptions and present it to the client while others only give templates and want you to customize them. Some will come on site for employee issues, some won’t.

What methods of communication will there be? Some technology driven PEOs handle client interactions through self-service applications. You may have opportunities to meet in person with the PEO’s service team provided one is available. Be aware that many PEOs use call centers to answer client questions, while others assign a dedicated team that the clients contact whenever an issue arises.

What are their credentials? American Payroll Association (APA) offers two levels of certification – the Fundamental Payroll Certification (FPC) and the Certified Payroll Professional (CPP). HR Certification Institute (HRCI) offers six certifications that show relevance, competence, experience, credibility and dedication to human resources. The most common are the Professional in Human Resources (PHR) and Senior Professional in Human Resources (SPHR) certifications. To gain these credentials, HR professionals must meet certain experience and education eligibility requirements, pass a comprehensive exam and get re-certified every three years.

What is the staff to client ratio? The staff support ratio is the number of the PEO’s service team members to the total number of their client companies’ employees. This is a good way to compare the level of service you can expect from one PEO to another. For instance, a PEO that provides one service team member for every 1000 client employees may be slower to respond to your requests than a PEO that provides one service team member for every 100 client employees.

How long have they been working in the Company? Ever have a great account manager that leaves the company and is replaced by a lousy one? If every HR person on the call has low tenure with the PEO, what is happening internally? You wouldn’t get a haircut from a stylist who had bad hair. Why would you get HR advice from a group that has high turnover?

5. Reputation of the PEO

What are their values, what do they believe in as an organization? Are they practicing what they preach? Like building teams if the values and ideologies of everyone involved don’t align that might jeopardize the success of the team. If an organization doesn’t have fruit on the tree in an area you’re looking to grow in they can’t help you.

A good example would be if increasing employee morale and satisfaction is important to you, what does the PEO have in place structure wise to assist on that front? Do they openly communicate with employees on how to take advantage of available programs or are they available to take calls in times of need?

Be sure to ask your PEO Consultant many questions on about the look and feel of the PEO relationship after implementation. Often times this ranks as the most important aspect of the relationship with a Professional Employer Organization.

6. Employment Practices Liability Insurance and Risk

Do you carry Employment Practices Liability Insurance (EPLI)? What coverage would my company gain through the co-employment relationship or does the policy only cover the PEO? Compare the level of risk you would gain or eliminate with one PEO versus another.

Some EPLI policies are what I call “Conditional Insurance” meaning the PEO decides whether to extend coverage to the client provided they followed the PEO’s recommendations to manage the issue leading to the claim.

Some PEOs take out an EPLI policy in both the client and the PEOs name, so regardless of the situation, whether the client abided by the HR team’s recommendation, the client has coverage.

W hen it boils down to an employee lawsuit, how much ownership interest will the PEO have?

Involve Your Team

It’s also smart to involve a trusted business advisor which might be a strategic financial consultant, a business consultant, your health insurance broker or a PEO Consultant .

About the Author:

How Will COVID-19 Impact Health Insurance Rates?

Wed, 02 Sep 2020 14:30:34 GMT

Health Insurance Deep Dive:
Renewals, Rates, and COVID-19

If your company provides access to group health insurance plans for employees or is considering doing so, it is important to become familiar with the health insurance renewal process. Health insurance renewals are an annual event when insurance carriers adjust their rates and offerings, allowing employers an opportunity to select new plans.

For insurance carriers, renewals are a time to make sure plans are up-to-date with current rules and regulations. They also are able to adjust pricing to take into account inflation in the health insurance industry and reassess the risk associated with each individual group. As an employer, renewals give you the chance to pick new plans and reset contributions. You can think of it as an opportunity to tailor your employee benefits to align with the needs of your team.

It's typical for employers to see increases in their rates when they go through the renewal process. Here, we'll explore why that is and what impact the COVID-19 pandemic may have on the renewal process for 2021 and beyond.

Company Factors that Impact Health Insurance Rates

When determining your rate for the upcoming plan year, insurance companies consider several factors specific to your business.

Plans offered: The types of plans you decide to offer will impact your rates over time. Insurance carriers want to ensure that the amount of premium collected through each plan can sufficiently cover the claims incurred under the plan throughout the year. Offering a variety of plans at different levels of richness and cost can help create a more even distribution of the number of employees across plan options at enrollment

Enrollment: On top of the plans you offer, the people who actually enroll in them matter too. Remember, enrollment in the plans you offer often changes throughout the year. For example, you may have hired new employees or had other employees leave your organization. Some employees may experience a Qualifying Life Event resulting in added or dropped dependents. Your new rate is reflective of your currently enrolled members and their dependents. In addition, the higher percentage of employees that are enrolled is considered to be less risky than if you have a limited number of employees participating.

Predicted plan usage: How your plans are used over time throughout the year will factor into your new rate. This is because insurance carriers use your current plan usage to predict how your enrolled members will use coverage in the future. By keeping employees educated about cost reduction techniques and how to get the most value out of their plans can lead to a lower insurance renewal trend savings your companies thousands in the process. Good examples would be the use of GoodRx for prescription drugs, Urgent Care for emergencies when viable, and Telehealth programs.

Economic Factors that Impact Health Insurance Rates

In addition, insurance companies also consider a number of macroeconomic factors when determining your rate for the upcoming plan year.

Overall industry performance: Insurers consider the overall performance of the health insurance industry at-large in addition to the performance of their business, both of which will impact plan prices for the upcoming year.

Geographic performance: Insurers also tend to benchmark their plan performance by geographic regions. How well their plans performed in your specific part of the country and how people are using healthcare in the state or region where your business is headquartered can also contribute to your plan prices for the upcoming year.

Government-mandated benefits: Each year, federal and state governments can mandate that health insurers provide coverage for certain healthcare treatments or prescription drugs. These requirements, while ultimately beneficial for the general public can lead to increased costs for health insurers that may be reflected in your rates. One well-known example of coverage requirements changing is the Affordable Care Act’s (ACA) dependent coverage mandate, which required all new health insurance plans to provide coverage for dependent children until the age of 26.

Prescription drug and specialty treatment costs: Prescription drug costs, as well as the costs for specialty treatments for serious conditions (like cancer, multiple sclerosis, or rheumatoid arthritis) have been consistently rising year-over-year. The more you can provide employees in terms of education on how to shop for prescription drugs the better position you will be in to prevent large increases due to pharmaceutical needs.

Overall inflation: Health insurers, like most businesses, factor overall inflation into their pricing changes each year. This is mostly attributed to the rise in overall costs charged by healthcare providers. It also factors in an aging employee base that naturally will require an increase in healthcare needs as time goes by.

The main thing to understand is that the cost of healthcare services (like any other product or service regulated by the economy) are subject to change over time. As these costs increase or decrease the changes will be reflected in your healthcare renewal rates.

The Still Unknown Potential Impact of COVID-19

During a recent webinar hosted by New York based PEO Justworks , Senior SVP of Health and Benefits at Aon Risk Solutions expanded on the topic of how Covid 19 may impact health insurance rates moving forward.

"I literally get asked on a daily basis what the impact of COVID-19 is going to be on renewals, The truth is, we really don't know the answer yet."

COVID-19 has created many unknown factors that will almost certainly impact healthcare costs and renewal rates for 2021.

The potential costs of COVID-19 include things like recurrence and testing, requirements for employers to cover potential preventative treatments or vaccines, and the potential higher ongoing costs of patients who recovered from COVID-19 after severe illness but are not back to "normal" (pre-COVID-19) claims cost levels.

In addition, there's the potential spillover of other care from 2020 to 2021 — in other words, people are putting off care now and waiting until next year, adding to future claims.

While it's hard to say for certain the impact all these factors will have on the health insurance market, it's safe to say that virus costs are coming.

Keeping all this in mind and being strategic about your company's health insurance offering today is vitally important.

How PEOs Can Help Reduce Renewal Increases

One strategy employers can use to contain benefits costs is to be proactive in evaluating your health insurance options. Regardless of when your renewals date is, exploring available alternatives now — including PEOs — may help you to choose the best option for your company in 2021.

PEOs like Justworks help you strengthen your benefits package by allowing you to gain access to nationwide insurance carriers with extensive networks of doctors, more choice and richer insurance plan options, and added benefits like mental health services and telemedicine — especially relevant in today's remote work climate.

For many employers, working with a PEO provides access to a master health plan that helps spread risk across multiple companies and add predictability to health insurance costs. By limiting insurance increases each year it will allow you to continue to offer more value to your employees via a robust selection of plan options at reduced rates than you might find elsewhere.

About the Author

The Alphabet Soup of PEO’s and EPLI

Fri, 10 Jul 2020 18:09:13 GMT

Evaluating EPLI Solutions with PEO's

There can be significant advantages when partnering with a Professional Employer Organization (PEO), especially for a small employer that may not have the breadth of HR expertise or the advantage of an entire risk management department.

Perhaps most important to their clients is that PEOs keep up with regulatory changes to ensure compliance and minimize risk to business owners.

This is why it is important to ensure that the PEOs you consider are not only up-to-date on regulations, proactively inform you of regulatory changes, but that they also provide an appropriate risk management system that includes Employment Practices Liability Insurance (EPLI).

Often referred to as EPLI coverage , this insurance protects businesses against an area of United States labor laws that deal with wrongful termination, sexual harassment, discrimination, invasion of privacy, false imprisonment, breach of contract, emotional distress, and wage and hour law violations.

Not all EPLI Policies are Created Equally

Not all insurance products are alike, and neither are EPLI coverages. While the advent of EPLI coverages is still relatively new (compared with traditional insurance products), most insurance brokers still have not heard of such coverage, do not know what the acronym means, and do not know the limitations and restrictions of EPLI coverage.

Thus, it is critical that your PEO know the various EPLI plans which are available and what they cover and do not cover.

Businesses cannot afford to ignore the chance that a workplace offense could put their organization in serious peril. After all, a big judgment for an aggrieved employee, not to mention the cost of litigation, could be devastating. But the right insurance policy could soften the blow. It might even save a business.

Even unfounded allegations can come with a price—which is why EPLI is essential. A business may do everything right and follow best practices and policies, but that does not stop employees from filing lawsuits, especially in poor economic times. The average cost for defending and settling employment law cases is over $150,000.00.

Make Sure The EPLI Policy has the Coverages You Want

In vetting EPLI coverages it is essential to note that standard EPLI policies generally do not include wage and hour claims, such as allegations of non-payment of over-time, missed meal and rest breaks, deficient pay checks, shortchanging employees on tips or failing to pay for time spent checking bags or putting on protective clothing. Other types of claims that typically are excluded relate to the Worker Adjustment and Retraining Notification Act, COBRA, the National Labor Relations Act, the Occupational Safety and Health Act, and the Americans with Disabilities Act.

Therefore, it is critical in choosing a PEO or in choosing between various options of EPLI coverage within a PEO, that the PEO understand that a standard EPLI policy has significant gaps in coverage and in areas where the business/employer is most vulnerable – wage and hour issues.

It is for this reason that in choosing a PEO, to first inquire if the EPLI coverage being offered also has what is often termed as a “wage and hour supplement”. Such supplemental coverage, provides limited coverage for wage and hour claims and such limitations must also be understood. But the important thing to know and to enquire about is whether such supplemental coverage is offered and if not, can it be obtained.

If wage and hour supplemental coverage is offered, be mindful that such coverage can and only covers the cost of defense (legal fees and costs), but does not provide indemnity coverage (settlements or judgments).

Moreover, this type of EPLI or supplemental coverage usually has what is commonly referred to in the trade as “burning limits”. This means that every dollar that the insurance company spends on defense (attorneys fees and costs), there is a dollar less that the business has in available coverage for other claims. Thus for example, if a robust EPLI policy is provided with $1 million of coverage under a burning limits policy, if the defense fees and costs are $200,000, then that leaves the business with only $800,000 in insurance (or settlement or judgment money).

The Importance of PEO Consultants and Your Attorney

Most PEOs do not know about or are not well versed in wage and hour supplemental coverage and its limitations and also are unfamiliar with “burning limits” policies. Therefore, in choosing a PEO, inquiries must be made of them to determine if they know about such intricacies and if not, can they put you in touch with their insurance broker and also, what EPLI products and options are available to your business.

Next, in determining the amount of coverage needed, the key parameters of coverage―what limit, at what cost and how much you must pay before it kicks in—vary significantly by employer size and by what state or region the business is located. Some states and regions are notoriously more litigiously oriented than others; some are more “employee friendly”; and each play a significant role in the underwriting process to determine premiums.

Small companies sometimes have up to $1 million in coverage against employment law claims. But before that coverage takes effect, there is a retention amount (deductible) that the business must first pay. This is often anywhere from $5,000 to 25,000 for smaller policies. It should be discussed with the PEO who is responsible for paying that retention (the PEO or the business).

At the other end of the spectrum, for companies with $5 billion or more in revenues, the median limit purchased is usually $30 million or more, with a retention of approximately $1 million.

Not all PEOs are one-size fits all and neither are EPLI policies. It is therefore critical to ensure that the PEO you choose other than meeting all other business requirements, is well versed in EPLI and supplemental coverages and can and will provide your business with each coverage available to suit your needs. It can and will be very costly to both the PEO and the business if a lawsuit arises where either there is no insurance coverage or not enough coverage.

Pro tecting Yourself with the Right EPLI Coverage

It can and will be very costly to both the PEO and the business if a lawsuit arises where either there is no insurance coverage or not enough coverage.

About the Author

Employee Benefits Millennials Covet

Mon, 08 Jun 2020 02:05:32 GMT

Benefits Millennials Look for in the Workplace

Perks That Younger Professionals See Value In

T here are many different factors that millennials consider when they view their current or future place of employment. While it comes as no surprise that Compensation , Health Insurance Benefits , and Retirement Plans like a 401k Plan are referenced as the top three reasons why employees stay or join an organization, many employers and business owners struggle with identifying which other employee benefits are the most coveted.

Flexibility and Working Remotely

T his is significantly important to working professionals as a deciding factor when taking a job. Companies could utilize this option for current and future employees when negotiating wages/salary because employers and employees don’t get paid during their commutes.

Having the option to work remotely or in office provides often leads to higher levels of productivity and makes it easier to have a strong work life balance.

Recent SHRM studies show that organizations that extend flexibility to employees are best poised to hire and maintain top talent citing that 79% of working mothers and 77% of working fathers agree they would stay with a company longer if it offered flexible work options.

Millenials covet the ability to be judged on their work and not their presence.

Paid Vacation or Flex Paid Time Off (PTO)

Overwhelmingly in the blue-collar fields, this perk goes a long way. Employers also see value in this benefit as they are able to reward workers with extra paid leave as opposed to a salary/wage increase that comes with a long-term financial commitment.

Have you heard of a good employer that gave someone a pay increase and then lowered it later? Yeah me too. In fact, a Glassdoor’s survey indicated that employees valued vacation or paid time off over a salary raise.

If you already offer 2 weeks or 10 days off a year, why not offer another flexible 5 days instead of a salary increase? This saves on that extra salary increase and employees love it!

Millennials Love Food at the Workplace

Food... Yeah the other dangerous 4-letter word. The average office worker’s diet, and by extension, their overall health is impacted by what is available on the premises of their workspace.

Remember being in a pinch on time and needing something quick to eat? Yep those stale Pop Tarts aren’t going to make those employees excited, but would a nutritious smoothie or fill-in-the-blank healthy snack increase employee satisfaction? You betcha!

Employees will appreciate just the gesture. Famous employers like Google are revered for offering healthy, gourmet-quality food choices that its employees love.

Did you already implement the remote worker benefit discussed above?

There are affordable options for companies to provide healthy snacks to their employees directly to their doorstep.

Gym Memberships or On-Site Fitness Centers

W ould employers rather negotiate the salary increase with an employee or have a one-time negotiated savings plan with a local gym?

Of course, not all employees would appreciate this, but according to the Centers of Disease Control (CDC) 53.3% of adults in 2018 aged 18 and over met federal physical activity guidelines for aerobic activity.

Do you think more or less of 53.3% of the workforce wants be sitting down all day?

Does your office or work environment have a lot a of space? What about having a trainer or yoga instructor once or twice a week for group fitness classes?

An investment in your employees fitness helps increase energy levels, create a positive culture, and shows an investment in your employees lives and overall well being.

Commuter Benefits

Does anyone enjoy commuting? According to Texas A&M Transportation Institute’s annual Urban Mobility Scorecard, commuters in major cities spent between 50 and 82 hours in their cars last year.

Commuter benefits are a way an employer can provide employees with tax advantaged programs that help reduce the financial investment in their commute. This can help with tolls, parking, trains, and bus fare.

For employers in larger cities this perk is becoming more and more of a necessity. Almost every New York PEO views commuter benefits as a benefit staple based on the evolving transportation habits of Millennials and future generations.

Millennials Expect More From Employers

As you can see business owners and employers are challenged with what type of package to offer their current or new employees. There are many complexities involved when selecting the full package.

In addition, Millennials appreciate positive feedback, coaching, guidance, and the opportunity to grow within the role and organization.

One thing is for certain, companies can gain great insight into how to attract and retain great employees by engaging subject matter experts that have experience identifying the best hiring and tenure packages.

PEO organizations like Insperity PEO help their clients tailor custom E mployee Benefit Packages to help them offer the best options that their employees are looking for.

ABOUT THE AUTHOR:

Should You Use Your PEOs 401k Plan?

Mon, 24 Feb 2020 00:57:49 GMT

Evaluating PEO 401k Options

One of the most frequent questions we are asked by those looking into partnering with Professional Employer Organizations is "What are the pros and cons of switching to the 401k offered by the PEO?".

Often it can be a struggle to get a straightforward answer from the PEOs themselves. With the 401k plan being one of the most sought after Employee Benefits , it is important to understand the differences between using the PEO option or an outside solution.

401k Plan Options When Working with a PEO

There are two different ways to incorporate a 401k retirement plan for your employees when partnered with a Professional Employer Organization.

The first way is through a Multiple Employer Plan which is often referred to as an MEP. They can offer these plans due to the Co-Employment relationship that is created when entering into your partnership. An MEP is a retirement savings plan adopted by multiple employers that from an income tax purpose are unrelated and do not share ownership.

The second way is traditional: you offer a 401k plan by sponsoring it yourself. A PEO will refer to this option on their paperwork as a SEP or a Single Employer plan.

Since employees are tied together by two EIN numbers in a Co-Employment relationship, you will be able to choose between implementing the MEP plan via the PEO or sticking with a Single Employer Plan (SEP) from an outsourced third party. In the event you utilize a third party the PEO will handle the deductions via payroll and track accordingly for tax purposes.

Benefits of the Multiple Employer Plan with a PE O

As we review many of the benefits, please take note that each PEO 401k solution will vary from one PEO to another. They will have different terms, funds that are available, and partners such as Slavic, TransAmerica, Voya Financial, Reliance Trust and others.

1. Outsourcing your 401k Fiduciary Liability

There are three major responsibilities that the PEO will address when taking on the Fiduciary Liability associated with offering a retirement plan to employees.

First is the 3(16) which lists the PEO as the plan administrator. This means the PEO assumes responsiblity for determining eligibility, providing disclosures notices to participants, maintaining plan records, authorizing plan investment decisions, and filing the form 5500 annual report to the Department of Labor.

The second Fiduciary role that the PEO assumes is 3(21). In this role, the PEO will provide participants in the 401k with education materials and access to investment advice.

Lastly in a role that is most notably absent in most 401k plans, is role 3(38). This fiduciary role puts in writing who holds the legal responsiblity of Investment Manager that removes the Employer from this liability. This prevents the Employer from being held responsible for the selection of investment options, reporting on investments, benchmarking investment options, managing investment policy statements, and replacing investment choices as deemed necessary.

In short, if the stock market takes a turn for the worse, Employees could experience a significant reduction in 401k plan assets. If it is proven that they did not have access to educational material, that their fund choices were not being actively monitored, or that the investment options available were not being maintained to the highest standard then (without contracting out these fiduciary liabilities) the Employer could be held financially responsible for Employee losses.

By implementing a PEO’s 401k plan option, an Employer can reposition these responsibilities onto the PEO while also feeling confident that Employees are being provided high-level options for their retirement.

2. Reduction in 401k Adminstrative Costs

Implementing a 401k plan comes with costs associated with that plan. If you are unsure of what your costs are with your current plan, a good place to start is by taking a look at your 408(b)(2) fee disclosure form.

For groups with over 100 eligible employees, the IRS requires that there be an annual audit through form 5500. As a plan sponsor, the PEO will handle this process for you and can provide savings anywhere between $5,000 - $10,000 annually.

From an asset management perspective, a PEO will often hide a majority of its fees inside the funds and carry a small quarterly maintenance charge for the Employees. For groups with less than One Million Dollars in assets, this often leads to additional costs savings due to the PEO having much lower asset-based fees than what can be found on your own. That said, not every PEO has the strongest 401k offering so this needs to be evaluated on a case by case basis.

A PEO will typically charge a setup fee and an asset exchange fee in the event you are rolling over funds from a previously existing plan. These fees can often be negotiated or eliminated in the event the process is not being rushed.

Benefits of a 401k Plan Outside of the PEO Relationship

While implementing the PEO 401k Solution comes with the above benefits, there are pros as well to partnering with a financial advisor and third party administrator. While these solutions vary by provider they generally all can offer the following advantages.

1. Making Changes to 401k Plans Outside of a PEO is Much Easier

Do not get caught overlooking the initial savings at the expense of the long term vision of the company. In the event that you leave your PEO relationship and you have your 401k with them, you will be forced to make a change to your plan.

If you end up changing PEO’s or shifting to an unbundled solution more than once over a five year period, you will have moved your 401k assets three separate times within that time period. Each time you make the change you encounter a blackout period which can impact an Employees ability to take advantage of potential market gains. It also can cause confusion and be a large burden for employees to constantly switch providers.

For those looking to scale their business and add employees over the years, this component or expense alone usually is enough of a pro alone to implement a solution outside of the PEO. This will allow you to reduce fees that come with changing 401k providers and allow Employees to more easily manage their funds.

2. 401k Plans Outside of a PEO Have Greater Flexibility

While a PEO will usually have a very strong fund line-up for participants to choose from, they will not be able to customize a fund line-up or build in a grouping of funds (such as Vanguard ) in the event that there is something specific that they are looking for. If you prefer that type of flexibility or have a specific fund family you prefer to utilize, then you will want to avoid implementing the 401k solution available from the PEO.

In addition to asset choice, having your 401k plan outside of a PEO brings technology flexibility. When utilizing a PEO, you are limited to the technology that is offered by the PEO and their 401k partner. For some this can be very basic. With the importance of retirement education at the forefront of Employees minds, having your 401k set up outside of a PEO allows you to choose which vendors and technology you want to incorporate in your plan. This allows you to provide employees a greater level of financial wellness information.

On the high end of the technology spectrum, Employees can load information into the system and have the retirement tools recommend an overall Financial Wellness plan. They will map out if available funds would be better served in the 401k plan, a HSA plan, a college savings account, or even towards paying off debt. These tools are considered a real asset with Employees who are looking for guidance towards their overall Financial Wellness in addition to identifying strategies to reach retirement goals.

Identifying Which PEO 401k Strategy is Best for Yo u

Both strategies have their place so it is important to take assessment and see which option proves most beneficial to your group.

After factoring in costs for the business and its employees, the administrative burden of each option, and the access to technology for employees, you will be in a better position to make a decision that can positively impact your long term business success. Employees deeply value an investment in their retirement so whichever 401k option you feel is best for your group will certainly be welcomed!

About the Author

ESAC vs. CPEO: Which Is More Important for PEO Clients?

Wed, 29 Jan 2020 22:04:24 GMT

Exploring the Differences Between PEO Certifications

PEO Industry has over 900 Providers to Choo se F r om

Built to offer outsourced HR solutions and boost cost-savings, most PEOs can end up feeling very similar if you do not know what to look for when attempting to identify the differences between them.

However, when you peel back the layers, there are two critical credentials you can look for that can provide some assurances when considering different PEO options: the ESAC Accreditation by the Employer Services Assurance Corporation and the Certified Professional Employer Organization ( CPEO) IRS designation.

W hat are the Differences Between ESAC and CPEO?

ESAC Accreditation

Gaining an ESAC accreditation requires compliance in more than 40 industry best practices. The goal here is to hold PEO’s accountable for financial stability, ethical business practices, and adherence to regulatory requirements. The agency focuses on both state and federal regulations when going through its approval processes to ensure that only the most thorough PEO groups are recognized as trustworthy service providers.

Once accredited, ESAC provides surety bonds to protect the payment of wages, payroll taxes, employee benefits, and insurance premiums for employers.

To maintain accreditation, PEOs are routinely monitored by ESAC to ensure compliance. This includes Quarterly Audits for those who are showing signs of strength and are not in danger of losing their accreditation in any area of their solutions. If a PEO finds itself in a position where they are in danger of falling short of any of the required guidelines then ESAC will increase these audits to a monthly status until the PEO has proven that it is no longer in danger of potentially losing its status as a top of the line PEO provider.

As of today only 5% of PEOs have earned the Certified ESAC distinction

Certified PEO Designation

I s the ESAC Accreditation or the CPEO Designation More Important ?

Given the additional assurances businesses receive through ESAC and CPEO, you know that you are in great hands if you are able to find a PEO who actively holds both credentials. This provides peace of mind when it comes to all things payroll tax and compliance related.

While all PEO's will claim to be a vendor you can rely on, the acknowledgement of these groups allow for you to know that the PEO is recognized for not only embodying best practices, but for voluntarily having these practices audited.

Choosing a PEO is a critical decision and partnering with a group that is both ESAC accredited and CPEO Certified like Extensis Group ensures employers are making the best possible choice for their employees while significantly lowering the financial risk and liability of the business.

That said, ESAC accreditation is a much more stringent process with a higher bar and between the two in our opinion carries the most weight. If you are considering partnering with a PEO that is not ESAC accredited then you are leaving yourself open to a multitude of potential future complications when it comes to compliance and payroll reliability.

Where to Find if a PEO is Accredited

According to the National Association of PEOs , professional employer organizations help their clients grow at higher rates and position them to have strategic advantages over businesses that don't. With careful consideration and proper due diligence, PEOs can be a very powerful partner for your business.

To see which PEO’s have the ESAC and CPEO designations, talk to a PEO Consultant or visit:

IRS.gov for CPEO listings>>>

ESAC.org for ESAC listings>>>

To Contact the Author

Expert HR Predictions for 2020

Fri, 13 Dec 2019 15:28:29 GMT

PEO Focus Featured on Industry Expert Panel for 2020 HR Predictions

2020 is upon us and while 2019 was hopefully a great year for all it is important to keep an eye out for what trends in HR and Employee Benefits we expect to see in the future.

PlanSource's Meisha Boichicchio spoke with over 15 different industry experts from HR Managers, Consultants, CEO's, and one of our very own PEO Consultants Michael Roloson to look into what new trends we will be paying attention to in 2020 and beyond.

The article can be found here and is titled Ask the Industry: HR Predictions For 2020 .

Which PEO in Charlotte is the Best Fit for My Business?

Mon, 28 Oct 2019 12:48:28 GMT

The Charlotte PEO Focus Team Explains How To Choose

The Question of Which Carolina PEO is Best

When the phone rings or the email dings from someone in the Carolina’s looking for information about whether or not a PEO may be a good fit for them the most common question we receive is, “Which PEO out of Charlotte is the most likely the best fit for our business?” . Well, unfortunately there is no simple answer for that question but right now we will try to answer it to the best of our ability. So without further ado, let’s dive right in to why this question does not come down to a simple answer.

There are over 75 PEO options that Service North and South Carolina.

While there are only a few Publicly Traded PEO’s that have sales teams in the Carolina region like Paychex which recently purchased HROI and Oasis , Insperity , TriNet, ADP TotalSource , BBSI and GMS to name a few, there are also many Private Companies like Total HR , CES , Propel HR , and FrankCrum that are not as well known. Even more so, there are PEO’s that service North Carolina and South Carolina that do not have a physical presence and for the right groups offer a much more strategic solution than some of those that do.

For the most part, even the PEO’s with a physical presence in the Carolina regions have service teams that are located in different states with Florida and Texas being the most common. So choosing a PEO with an office in your region really does not provide too many advantages as more often than not your HR Consulting and Payroll teams will be based out of state.

Yeah Yeah but which one is the best?

Oh right, I am supposed to be telling you which Carolina PEO partner is the best. The issue here is, there is no blanket answer. We could speak with 10 different business owners and identify 10 different answers. The key is being able to comprehend what your business needs are, how your growth plans are impacted by the solutions the PEO can put in place, and the way your employees utilize different benefit options . For example, if your business is extremely busy and chaotic in October, November and December for year end, than there may be value in working with a PEO that has their Employee Benefits open enrollment period in April or June. Does your company have a large group of employees that are hourly and have needs for job costing or are they mostly salaried employees? Are your Workers Comp needs high risk or are your employees mostly working from an office all day? These are just some of the questions that may impact a decision to focus on some PEO offerings over another. The most important part is not feeling like you have found the “ Best PEO ” but rather that you have found the best PEO for your needs.

So how do I know which questions to ask and how to find the right PEO?

This is the part of the article where I get to promote our team and how we help our clients feel comfortable with the PEO or other similar options that are available to them. As PEO Consultants , the Charlotte PEO Focus team helps our clients identify which PEO’s excel at offering the services that matter the most to them. We also help you uncover what those needs are by providing you with a complimentary consultation so that everyone better understands what services and offerings are available that will have the greatest impact on your goals and what you are trying to accomplish internally. By taking the guesswork out of the RFP process, your business is in a better position to understand all of your options and negotiate the best position.

So What Does This All Mean?

What this means is that there is no one answer that can satisfy this question. That each business will have its own goals and needs so it is important to partner with the right group for you. We help our clients understand the differences between each PEO’s offerings and how each solution can impact their business. By taking the guesswork out of the equation and adding transparency to the buying process our clients are in a position to make an educated decision and be comfortable with the PEO that they choose.

To Contact The Author

How to Find the Right Payroll Solution

Tue, 01 Oct 2019 12:42:22 GMT

American Express Business outlines what to look for when considering new Payroll Solutions.

American Express writer Erika Napoletano sat down with the Director of Business Development at PEO Focus Michael Roloson and the CEO of TILR Carisa Miklusak to discuss what to look for when evaluating your Payroll Solution Options heading into 2020.

As technology continues to improve, Payroll has expanded beyond delivering checks to include multiple offerings that can make a positive impact in company culture. With so many advancements it can be difficult to know which solution is the best fit for you as making a chance can be disruptive. The right Payroll Solutions should make things easier for you and your team while providing a seamless experience for your employees.

American Express dives in to find out what to look for when considering a payroll change so you can find the right vendor to fit your needs long term. From assessing your current solution, exploring the newest technologies, and implementing eligible work tax credits American Express investigates how to make the process easier and more effective.

Read the full article here at American Express Payroll Tips .

How Good Habits Trump Good Intentions

Sun, 01 Sep 2019 23:58:31 GMT

How Personal Structure in an Office Setting Leads to Efficiency

What you are about to read comes from over 20 years of sales experience…

For those of you that have your work and life balanced perfectly, or couldn't possibly be more efficient then I don't really think this piece will be of benefit to you, no need to continue. For everyone else who is working hard and still can’t figure out why things are tough, please read on.

Allow Me To Introduce Myse l f

My name is Brian Royer and I hope you’re tuned in. I write like I speak and I hold nothing back. My career started in NYC selling and then buying commercial airtime for NBC and then BBDO Worldwide respectively. Like many of my fellow sheep I worked 60-70 hours a week and let’s just say the pay was less than spectacular. Honestly at the time I didn’t really mind. I was 24, single and enjoying all the perks the Big Apple had to offer. What I didn’t know was that I was creating a blueprint for the person I am today, a 47-year-old separated father of 3 writing an article about good habits and motivation. At 24 what most don't know is that they lack the experience to make the right decisions that will impact their future but believe that with time on their side there is not much of a particular need yet to care.

So along the way I spent 20 years persuading and selling solutions/services for various companies. I’ve worked in the following fields: Advertising, Payroll, HR, Retirement Solutions, Medical Benefits, Website Design (PPC and SEO marketing), Talent Mgmt Software, Construction, Health and Fitness and I even owned my own bar/lounge. So what did I learn from all this various experience throughout the way? Well, I can say with 100% certainty that motivation should not be the KEY WORD in your plan towards success. Structure and Planning will trump motivation 99% of the time. For it's “BAD HABITS” that will destroy you and if you don’t start creating “GOOD HABITS” you’ll always be worrying about the “NOW” instead of enjoying the “FUTURE” . I f you aren't establishing small goals to bridge you to your big goals and building structure around your plan to achieve these goals then you will live on a glorious plateau and never reach the mountain top.

Motivation vs Structure

You’re probably like, what’s this guy talking about? How can motivation not be the key ingredient to my success or failure? Every Talent Acquisition Specialist duing the interview process will ask, “What Motivates You?” Almost everyone answers the question in the same generic fashion and for that reason, I’m telling you it’s the wrong question to be asking. Corporate America loves things they can sell. Words are no exception. With the right words, you can get anyone to do anything. The problem with the word “Motivation”, in my opinion is that one’s motivation can change in an instant, allowing a person to become distracted from their current task at hand. So I ask, what is more important, your motivation or the plan and structure put in place to help you reach success?

Channeling My Inner Timothy Ferris

How To Get Started With Structure

So, how do you start? The easiest thing to do is make a list. Yes, make a list. Put things down on paper so you can see it. Say what you are going to do that day and then go and do it. For instance, start tomorrow by waking up and getting ready for work like you would normally do. Allow yourself 15 mins to sit down and write 5-7 things you want to accomplish that day. Don’t make a huge list. Start small so you can get some “wins”.

For example:

1. Make 20 dials to totally new prospects and find out 3 things about the company at a minimum

2. Visit 2 clients and ask what they like/dislike about the business relationship

3. Ask for 2 referrals (one from each client, providing they are happy and willing to give you one)

4. Coffee/lunch with 1 business partner (Broker, Banker, CPA etc)

5. Set at least 1 appt that day. (may require you to dial more)

6. Go to Gym

7. Call your parents

8. Help someone you don’t know.

Notice that they are not all work related. This isn’t just about your job, it’s about becoming a better person both professionally and personally. You’d be surprised how much satisfaction you get out of crossing things off your list. The feeling of personal satisfaction is fantastic. After doing this for a month I realized that I was treating people better and getting more things done in a shorter period of time. My relationship with my kids got stronger and my outlook on life took a turn for the better. I’m not saying this will fix everything and everyone, but It has made a tremendous difference in my life and more importantly the people I interact with on a daily basis.

Baby steps my friends, Baby steps!!!

About the Author

HR Certification Institute Discusses Investment in HR Technology

Mon, 26 Aug 2019 18:27:17 GMT

HR Certification Institute Dives in to HR Technology

Clare Chiapetta of HRCI investigates a statistic showing that 70% of HR managers feel that they could benefit from upgrades in their companies HR Technology.

While identifying which solutions may be best can be a tall task, Clare sits down with Michael Roloson , Director of Business Development with Charlotte PEO Consulting Firm PEO Focus and Ellen Mularke y, VP of Business Development for the Talent Acquisition Firm Messina Group to discuss some ways to make the process a little easier to investigate.

Click here to read the article - HR Certification Institute Discusses How to Investigate HR Technology.

PEO Focus Launches Charlotte PEO Consulting Division

Mon, 12 Aug 2019 01:41:46 GMT

North Carolina is Making a Name For Itself with Small Business

Charlotte NC and Raleigh NC find themselves ranked in the top 10 of best cities for startups and top 20 in best cities for small businesses. As North Carolina continues to grow its footprint within the business community, the needs for Human Resources related tools will continue to grow.

With that at the forefront PEO Focus proudly launches its Charlotte Division to help businesses in the Carolinas grow and reach their goals more quickly. Things move quickly for small businesses and often that leaves many members of management wearing multiple hats. The Charlotte PEO Focus Team will work to implement solutions that can remove the administrative obstacles that are created by hiring more employees, implementing employee benefit solutions, remaining compliant with employer laws, and administering taxes.

The new division will focus on the full scope of consulting services that range from PEO Pairing through PEO Extraction and everything in between. To learn more about the services the Charlotte PEO Focus Team will offer visit us here at Human Resources Services . Enjoy the video and do us a favor by subscribing to our channel.

The Charlotte Division is a welcomed addition, joining the existing Pittsburgh PEO , New York PEO , and Raleigh PEO teams.

PEO Focus Launches YouTube Channel

Sat, 03 Aug 2019 16:51:36 GMT

PEO Focus kicks off YouTube Channel with Video Trailer

PEO Focus is a PEO Consulting Firm that works with its clients to implement the best Human Resources Offerings and Technology to best fit their needs. Visit our PEO Services page to learn more. To visit our YouTube Channel visit PEO Focus YouTube .

How a PEO Can Help Your Business

Tue, 30 Jul 2019 18:53:05 GMT

Do You Know How a PEO Can Impact Your Business?

For small and mid sized companies, a PEO may offer a strategic partnership that allows them to save time on administrative duties, ensure compliance, and increase the Employee Benefits that are available to Employees. PEO Focus Director of Business Development Michael Roloson partnered with the The Times USA to explore How a PEO Helps a Business Grow .

How to Evaluate a PEO

Sat, 29 Jun 2019 02:19:22 GMT

How PEO Consultants can Improve Your PEO Relationship

A PEO is a Professional Employer Organization

Professional Employer Organizations provide comprehensive HR solutions for small and mid-size businesses. A company would utilize a PEO to assist with things such as Payroll, Employee Benefits , Human Resources, Tax Administration, Regulatory Compliance, State Compliance, and Cost Management.

By reducing administrative tasks internally that revolve around paperwork and providing regulatory compliance assistance, PEOs help businesses improve productivity, increase profitability, and improve the employee experience.

Through a PEO, the employers of small businesses gain access to employee benefit programs such as: 401(k)plans ; health, dental, life, and other insurance; dependent care and other benefits at a scale and price point that is usually only available to larger companies.

Not all PEO Solutions are the Same

PEO solution offerings can vary wildly as they each look to assist their clients differently. This does not mean that one PEO is necessarily better than another. What it does mean is that one may be a better fit for you and your business as opposed to some of their competitors. This could be due to HR and Payroll Technology, Size of Employers the PEO targets, Tax strategies, HR services, Health Insurance Carriers and other various options that the PEO implements.

PEO Consultants Work With Your Broker

PEO Consultants like the team at PEO Focus assist with making it easier to understand where each PEO excels and can help eductate you on which ones will provide you with the most value based on your needs. They can help you navigate which offerings will work best for your employee base. Does your business have employees in multiple states, employees that are all salaried or work hourly shifts, work in an office or out in the field, offer expense reports or have those with 1099 needs? This is just the beginning of a line of questions that must be considered to see if a PEO can cater to your needs. We help make things more transparent so you can make educated decisions for your employees.

HR Strategy to Bring Value to Your Business

Your business is built to deliver value to its customers and to do so you have created a strategy that offers an experience that is ideal for your target customer base.

Just as you have built your business in this fashion, so has each PEO. They invest in a few key areas that can bring value to a range of business types but that may not be a good fit for others.

In addition they have trained their sales teams to focus on the areas in which they excel. Unfortunately this also means these sales teams may not even know about the areas of their solution that could impact you negatively. By utilizing a PEO Consultant to work along side your PEO or other members of your team you are able to add expertise to your organization. This will help save time and money by adding transparency to the process and allowing you to focus your energy on how to get the most value out of your PEO relationship.

PEO News Update

Key Factors When Entertaining a Change to Your PEO Provider

Key Considerations of Entertaining a PEO Change

Benefits of changing PEO Vendors

What to Evaluate When Changing PEO Vendors

Confidence in a PEO Switch

What to Look For in PEO Health Insurance Renewals

Many PEO health insurance renewals come out in Q4 and January 1st is always a big benefits renewal period - so let's explore how you can prepare and evaluate for your annual insurance renewal review.

Now Let's Talk About PEO Health Insurance Renewals

Some Other Factors that Can Influence PEO Health Insurance Renewals - What to Look Out For

Exploring Options if You Receive A High Increase

We Can Help Reduce Your Health Insurance Costs

BREAKING NEWS 2025 HSA and FSA Limits are out!

IRS Releases 2025 HSA and FSA Contribution Limits

The Health and Flexible Spending Accounts Can Offer a

Great Tax Break When Used Properly.

2025 HSA and FSA Contribution Eligibility

Tax Information Regarding HSA and FSA Accounts

PEO Focus Named Best North Carolina Employee Benefits Consulting Firm for 2024

PEO Focus Named Best NC Employee Benefits Consultancy 2024

Identifying differences between EOR and PEO.

Professional Employer Organization vs Employer of Record...Is Their Really a Difference?

Two Key Differences Between EOR and PEO

Exploring These Outsourced HR Solutions Further

Justworks Launches Payroll Solution

Justworks Releases Payroll Only Technology Solution

Justworks Payroll Brings Flexibility

Here is a closer look at the services offered:

Understanding the Pros and Cons of PEOs

How PEOs Work to Make Your Company Grow

2024 HSA and FSA Limits

New Year New Rules, IRS Releases 2024 HSA and FSA Contribution Limits

The Health and Flexible Spending Accounts Can Offer a

﻿ Great Tax Break When Used Properly.

2024 HSA and FSA Contribution Eligibility

PPO, HMO, POS, EPO - Exploring the Differences of Health Insurance Plan Network Types

Understanding the Differences of PPO, HMO, POS and EPO Networks

Let's dive right in and identify the types of networks that are available and how they impact your access to healthcare.

When choosing between Health Insurance plan options one of the major points of consideration is the network options that the plan may come with.

When shopping in an individual network you are choosing the plan that is best for you where those choosing plan options for Employee Benefits packages a Group Health Insurance suite of plans may benefit from having multiple plan options to choose from.

Employer of Record for International Employees - Explainer Video

The Advantages of Employer of Record

The Role of the Employer of Record

The EOR is tasked with the administration and guidance surrounding the complexities of navigating international guidelines such in areas that include:

﻿

A Comprehensive Guide to Outsourced Human Resources

Exploring The Landscape of HR Outsourcing

What HR Services Can Be Outsourced?

Why Companies Choose to Outsource HR Services

How to Outsource Human Resources

Which Providers Are Considered the best for HR Outsourcing?

Wrapping up our Discussion on HR Outsourcing

Are Business Owners Eligible to Participate in HSA and FSA Accounts?

A Deeper Dive Into how Business Owners Can Participate in

HSA and FSA Tax Advantaged Accounts

2025 HSA and FSA Contribution Limits

Director of PEO Focus Inc on WSIC Radio Show Local Biz Now

Video: Covids Impact in the Work Place

PEO Focus Named Among Top Professional Employer Organization Consulting Firms for 2022

PEO Focus Named Among Top PEO Firms 2022

Is 2021 the Year of the Resignation?

What Does the Great Resignation Really Mean?

Why You Shouldn't Be Too Worried

What Businesses Can Do To Protect Themselves

Involve Your Team

United HealthCare partners with Peloton to Improve Access to Fitness & Wellness

UHC Members to Receive Peloton Membership

Health Insurance Options Within a PEO

What is a PEO?

Small Business Owners Benefit from Using a PEO

Gaining Access to More Health Insurance Options

A PEO Handles Health Insurance Administration

A PEO Manages the Insurance Carrier Partnership

A PEO Helps with Planning and Organizing Annual Changes

Having a PEO Helps Employees be More Satisfied

PEO Focus Named Among Top PEO Broker and HR Consulting Firms for 2021

PEO Focus Named Among Top PEO Firms 2021

Update - We are pleased to announce we have won the award for Top PEO Firms for 2022!

PrismHr Security Incident Explained

What Exactly Happened To PrismHR?

Great Tax Break When Used Properly.

Health Insurance Deep Dive:
Renewals, Rates, and COVID-19