PEO Insurance – A Complete Guide

Reliable PEO

PEO Services
A quick lowdown on what PEOs are and what
they can do for your organization


Businesses across the world, and especially in the US are increasingly looking at ways to outsource certain employer responsibilities from payroll to employee benefits. This is where a Professional Employer Organization (PEO) comes into the picture and can take up an array of employer responsibilities under a co-employment arrangement.

While PEOs can offer a whole bouquet of services, the key element involves outsourcing your Payroll services which in effect creates the co-employment relationship. In other words, a PEO becomes the employer on record for a variety of legal purposes including tax compliance.

Besides outsourcing Payroll, there are several other optional services that PEOs can do for you. These range from managing employee benefits like health insurance and 401K plans to serving as a point of call from recruitment to employee counselling. However, for the sake of clarity PEO services can be broadly categorized into four segments which include Payroll, Employee Benefits along with Human Resource Administration and Risk Management


Payroll – The Cornerstone of Any Co-employment Arrangement

Keeping an eye on headcount is essential for every business, ranging from small firms to large enterprises. Employers often prefer to hire employees on the payrolls of PEOs owing to the flexibility it offers in negotiating different local regulations, industry practices and even business ups and downs.

Under this function, PEOs are tasked with the responsibility of ensuring your employees are paid in a timely fashion and in an accurate manner for the work they have performed. Thus, PEOs are responsible for keeping records of time entries and generating payroll reports and disbursing salaries.

It is possible for companies to view such reports including details of wages paid against every employee that the PEO employs on their behalf.


Complying with Tax laws

A great part of working with PEOs is that they take the pain of meeting tax compliance requirements. PEOs are responsible for deducting relevant taxes as per federal and state rules from employees and ensuring the same is deposited with relevant authorities in a timely fashion.


Managing Detailed Records and Generating Reports

Employers especially small businesses and Startups can get easily hassled by the number of records that a business needs to maintain. With a PEO in the picture, all such things like keeping track of vacations, sick pay, compensation history and deductions can be offloaded.

In other words, the PEO becomes responsible for meeting all statutory regulations whether local or federal related to your employees.

While the pain of keeping records is taken away by the PEO, it is equally responsible for generating reports related to key activities. Typically, such reports are available through a web-based platform and details related to each employee are also available.

Many PEOs even allow for such reports to be downloaded in Excel format or be emailed to you. Companies can on case by case basis even request for detailed reports for making statistical inferences.


Dealing with W-2s and Facilitating Direct Deposits

A whole gamut of annual payroll related tasks like handling audits to managing year-end W-2s comes under the responsibility of PEOs. They are mandated to send W-2s to individual employees based on payroll data of the previous year. PEOs can also facilitate direct deposits and even fund three separate accounts for every employee.


Managing HR Services

The role and responsibilities of the Human Resources team have grown over the years. Today companies are mandated to follow an array of complex compliance norms which can choke up the HR team in your company.

By outsourcing HR Administration services, you can keep such hassles away and increase efficiency. You may even get dedicated executives from your PEO to manage such tasks ranging from operations support to compliance assistance.

Next, let’s look at some key categories that are covered here.


Meeting Critical Compliance Norms

Even a cursory look at the regulations that employers need to follow in the US can seem daunting to a small business and startup.

However, with help of HR specialists from a PEO, you can deal with compliance requirements such as I-9 authorizations to verification of social security numbers and EEO-1 tracking. Such specialists can also come handy in new hire reporting and keep you compliant with FLSA act, ADA act, and ADEA norms.  They can help you file the mandated equal employment opportunity 1 reports with the US EEO Commission.


Creating a Conductive Employee Infrastructure

While companies are responsible for creating their own culture and work practices, they are expected to follow guidelines issued by relevant authorities. PEOs can help in creating employee rulebooks and conduct sensitivity training to comply with equal opportunity laws and FSLA reviews.


Providing Comprehensive Operations Support                                

Managing employees is a tricky aspect that HR teams need to deal with on a regular basis. In case you are short on qualified HR representatives, you can look out to a PEO for providing specialists to deal with complex tasks like handling employee relations to managing performance improvement goals.

In some cases, specialized executives come handy in dealing with disciplinary actions and undertake program reviews. In specific cases, such consultants can also play a role in providing employee support in case there is a layoff to dealing with claims. Many PEOs offer comprehensive plans that deal with aspects like claim processing and management.


Facilitation a Human Resource Information System(HRIS) for Transparency

Depending on your organization size and requirements, the PEO can provide a comprehensive HRIS for managing several HR activities. Such systems allow both company executives and employees to have complete transparency about key aspects of payroll, work hours, employee benefits, tax deductions etc.

From managing holidays to implementing reviews, HRIS can serve as a single point of information retrieval for both employees and managers.


Employee Benefit Services – A Key Differentiator for your Business

A large number of startups and smaller firms are unable to hire or retain quality employees owing to the lack of benefits they can dish out to their employees. Often staggering compliance requirements hold such firms from fully committing to benefits programs.

PEOs can prove to be highly beneficial for such firms by facilitating such benefits without burdening company executives with keeping records and meeting intricate norms.

It is possible for PEOs to offer benefits that are expected from a top tier company. Essentially the PEO rolls out key benefits to employees without charging you the moon by maximizing its economies of scale.

With a PEO in the picture, you are likely to get highly discounted rates for rolling out employee benefits as opposed to opting them directly.


Dealing with the elephant in the room – Health Benefits for all your employees

For many firms, rolling out health benefits can be a complex and costly challenge. However, PEOs can take this pain away from you by keeping you compliant without costing a fortune.

In light of the Affordable Care Act, companies are increasingly collaborating with PEOs to deal with health insurance as they offer better plans and coverage. Coverage can even include dental plans and eye care.

One needs to understand that PEOs typically uses two separate approaches to rolling health insurance to your employees.

The first option involves creating a straightforward customized plan for your employees only.

The second and more cost-effective option involves allowing you to access its master health policy which comes with several insurance plans. These can range from executive plans to POS plans that offer greater flexibility.

The rates that PEOs are likely to charge for may vary according to the arrangement you have with them. In some cases, they may charge you a fixed rate for every employee they manage for you while in other cases they can offer specialized rates based on your employee demographics.

So, in other words, if you are startup primarily staffed by young twenty-something employees, you may have a good chance of taking insurance for your employees at a cheaper rate than an accounting practice staffed with highly experienced professionals.

For companies that are operating out of different cities and geographic areas, collaborating with a PEO with a national footprint can be of great benefit. Such a PEO can offer you extensive coverage limits under their master health plans.

Retirement and Financial Savings

For an employer to get the best out its employees, it makes sense to offer guidance for investing in retirement plans and financial savings.

PEOs can take this responsibility and take care of regulatory issues such as filling with IRS and meeting other compliance norms.

PEOs typically offer 401(k) retirement plans besides offering saving plans like flexible saving accounts and 132 transportation plans.


Disability, Accident and Other Insurance Plans

If you choose to go with a PEO, you get the flexibility of offering your employees a host of insurance plans covering aspects like disability, accident benefits, and even secure hospital indemnity.

National PEOs are often the best choice for offering a gamut of insurance and other benefit options to employees as they may cover specialist issues ranging from Cancer care, Identity Theft protection to even cover for legal expenses.


Risk Management – Managing Compensation, Claims, and Safety

If your company is engaged in manufacturing or in any business where there are chances of injuries occurring to your employees during the course of their work, then engaging with a PEO is a no-brainer.

Dealing with issues like compensation and claims and providing comprehensive safety guidelines continues to be a challenge for some of the best companies in the world. Thus, it is way more convenient for you to outsource such task to a PEO which has the expertise to handle such issues.

Not only can PEOs help you formulate a company-wide compensation policy but they bring in their rich experience to create a safe working environment and bring down the chances of accidents. Some of the areas PEOs can help you here with include


Managing Claims and Detecting Possible Fraud

While a claim is put forward to your company, you can pass such requests to the PEO to investigate and do a proper follow-up. The PEO would take up all aspects of claim management and verify any possible fraudulent claims.


Managing Risks and Performing Audits

The PEO is responsible for managing all aspects of risk associated with worker compensation, benefit plans to compliance risks.

It is responsible for dealing with outlandish claim demands that may suddenly crop up to performing annual audits to meet compliance norms. Annual employee audits become the responsibility of the PEO and the client company can save many hours of valuable resource time – and with saved time comes savings on your bottom line.


Implementing Safety Protocols and Managing Drug Programs

With a PEO in place, your workplace is likely to be way more safe and conducive place to work in. They can perform an analysis of safety standards in place and implement guidelines that aim at best industry-wide safety practices. From site inspections to training, PEOs can virtually take care of everything related to workplace safety.

Moreover, PEOs have the expertise to roll out Drug programs that are aimed at weaning away employees from drug usage. From providing timely counseling to performing testing procedures to detect drug usage, PEOs can perform myriad tasks to improve the overall work atmosphere.


Running Employee Assistance Programs and Ensuring Overall Wellness

Owing to their extensive experience in handling thousands of employees, many PEOs have over time built commendable expertise in employee advocacy and providing all-around assistance.

From providing wellness coaches to improving the lives of employees to motivate them to achieve better results, PEOs make every effort to enrich the lives of the employees they manage on your behalf.


Recruitment Assistance

If needed, PEOs can also help in recruiting suitable candidates to work in your company. Owning to their huge network and employee linkages, PEOs offer a great way to ramp up hiring in quick time.

Finding the right PEO for your business can be a daunting task, but it can incredibly rewarding. Reach us today to find a PEO which best suits your requirements and serve as an enabler for your business.

A & C Management will assist you and deliver a PEO which will meet your needs. We do this at no charge to you. See our process of finding a PEO

Our goal is to keep you at the highest operational level.  Contact us today.

1 thought on “PEO Insurance – A Complete Guide”

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