If you're considering a partnership with a Professional
Employer Organization (PEO), you probably already know the many benefits of working with a PEO. But you may not be aware that not all PEOs are alike, nor
will all of them be good matches for your business. Just as each business has
different ways of operating, so do different PEOs. Here are some of the ways
PEOs can vary.
PEOs Serve Different
Industries
Every industry has its
unique regulatory requirements and logistical challenges. For this reason, some
PEOs add value by developing expertise in a particular industry or small set of
industries. The best PEO for your business is one with experience in your
industry—it will have the relevant knowledge to address the challenges your
business may face.
Differences in Employee Benefit Offerings
PEOs all offer some employee benefits, as well as workers'
compensation insurance. But the range of benefits PEOs offer can vary greatly,
depending on the types of businesses they serve. While some providers offer
only simple, low-cost group health insurance along with workers' comp, other PEOs offer additional benefits such as wellness programs, vision insurance, or employee assistance programs. So when shopping for a PEO, be sure to understand
exactly what each provider can offer. Here are some examples of PEO employee benefits and some of their factors that can differ depending on the chosen PEO:
Health Care Plans
- Group healthcare costs
- BCBS, Aetna, Human, United Healthcare (what's the best fit where you live?)
- Deductible options, co-pays and plans
- Credits for deductibles paid if moving during the plan year
- Management carve-outs, choice of plans for employees
- Extra charges for employees working in several states
- Group enrollment (will they show up for enrollment or expect you to do all the work?)
Workers' Compensation Insurance Differences
- Cost of workers' compensation insurance coverage
- States where coverage is provided
- A.M. Best rated vs. non-rated work comp carrier
- Risk acceptance (companies may have dramatic differences in the industries they approve of!)
- Ability to approve high experience modifiers or a bad claims history
- Per claim deductibles (some have them, others don't)
- Company safety programs
- True risk management services (or just a handbook?)
There is also plenty of variance in how employee benefits are funded. PEOs may choose from a range of strategies to fund the benefits they offer. While some providers are fully insured, some are partially self-funded. They also vary in their choice of third-party providers. All of these factors can affect the type of benefits a provider can offer you, as well as their costs to you.
How PEOs Operate in Different States
States
have differing licensing requirements for PEOs; thus, not all PEOs can operate
in every state. Moreover, some work with insurance carriers who only issue
policies in certain states. While going with a local provider can be a safe
bet, you may also find qualified non-local providers who are good matches for
you. So when shopping for a PEO, be sure the providers that interest you can
actually serve you.
PEOs Have Different Levels
of Experience and Expertise
Providers vary greatly in the sizes of their
staff as well as in their levels of expertise. Well-established PEOs may have
large staffs of HR and payroll specialists, while smaller, newer ones may have
fewer resources. Depending on the PEO, their payroll administration may differ on the following:
- Payroll administrative costs
- Per check charge or payroll driven percentage
- Charges or no costs for employee enrollment, garnishments, new hires, etc.
- Delivery costs (these can vary dramatically from $0 - $25 per payroll!)
- Payment options: automatic withdrawal (ACH), wire transfers, company check, cashiers' check
- Remote check printing options
- Pay card options
- Secure-24 hour online access to your company information
In addition, don't be afraid to ask for references from present or past clients when vetting candidate PEOs. Since the PEO will potentially be handling much of your finances, be sure to ask if their financial statements are independently audited by a CPA, since it's crucial that your provider be someone you can trust.
ELQ Helps Find the Perfect Fit
For overworked employers, navigating the differences among these providers takes more time than they have to give. Spending your time researching and vetting PEOs takes you away from running and growing your business. The PEO experts at ELQ can save you time by matching you with a PEO whose services fit the unique needs of your business. Our company only works with with ethical, fully licensed PEO providers, and we strive to maintain the highest quality customer service in the industry. Call us today, or fill out our contact form to find a PEO company that's right for your business.
