Health Insurance Options Within a PEO

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 workplace. 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 Benefits 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.