Everything You Should Know about Group and PEO Health Insurance for Small Business with their costs or rates; This insurance is stressful for small business owners and business leaders, right? In general, once a year you have time to determine what your company will do to provide adequate (and hopefully more!) medical care to your employees. It’s also the second biggest expense (after salary) and a decision your company shouldn’t take lightly.
What is PEO (Professional Organization of Employers) Health Insurance? Health insurance management – minimizing costs while improving insurance plans – can be done on your own, but do not recommend it. Do you want to know why? Take a look at the key differences between what your own company can do; and, what you get with a professional association health insurance (PEO) policy.
With PEO Health Insurance:
- You have access to PEO health insurance, which means you have better options (and more!). When working with a PEO, small businesses have huge benefits or advantages in finding a competitive health insurance plan because the PEO will choose the carrier. PEOs also have access to more product offerings to offer their small business partners. Perhaps the product is the best in its class.
- You don’t have to deal with health insurance administration issues. You won’t get tired of thinking, “There must be a better to go right way”. There she is! Not only will you find better products with the PEO option; but, you’ll also find an easier way to manage health insurance and administrative costs.
- The PEO manages the entire relationship with the operator. From initial policy decisions to annual renewal and open registration, everything is PEO-led.
- You can get help planning annual changes. In general, they are very familiar with managing large group health insurance companies. With health insurance management being a big part of a their solution; it is important to minimize surprises and have an overview of the plan’s implementation, and know what to expect if it renews.
- Your employees will be happier with their skills. PEO health insurance benefits add value to the lives of your employees. This benefit is perhaps the most important. By associate with a PEO to offer competitive their insurance, you protect the investment you make in your people or employee – happy and valuable employees are less likely to leave your company to seek other options and opportunities.
How much does Group or PEO health insurance costs or rates?
PEO health insurance costs or pricing or rates are important things to conclude. There are two ways PEOs can lower their costs:
- Wage or Payroll Percentage; This is a percentage of your total salary for each pay period, plus local, state, and state taxes, employee compensation, and civil liability insurance (EPLI). There is also an additional administrative fee. This can confuse accounting because PEO administrative costs vary from employee to employee and can change throughout the year.
- Per employee/month (PEPM); The PEPM fee negotiate directly with the PEO upon registration. This does not include separate setup fees, which can run into thousands of dollars. It also doesn’t include hidden fees for additional features or even things like starting off-cycle salaries.
Advantages or Pros, Disadvantages or Cons of PEO health insurance;
Now let’s discuss the best pros and cons of using PEO.
PEO health insurance pros or benefits or advantages;
- HR Is Totally Incompatible This is the main reason people use PEO. You take on all your HR responsibilities so you can focus on implementing your overall business operations.
- Current Regulations PEO ensures that your company is always compliant. They do this by following rapidly changing rules and regulations and providing a plan of action you need to take to follow them. However, the guidance you receive may biase in favor of the PEO because the PEO is the recorder.
- Competitive pros and Health Insurance PEO relies on purchasing power to negotiate affordable services and insurance for its customers.
- PEO obligations give you access to human resources professionals and licensed attorneys who can help you reduce job risks. So you don’t have to hire HR experts and lawyers yourself. It also means giving up control to follow PEO guidelines that don’t necessarily suit your culture or style.
PEO health insurance cons or disadvantages;
- There is no level of transparency in setting PEO prices. When salary percentages calculate, it can be difficult to say how much you actually paid. Bills can usually be fuzzy because they add up salaries, taxes, employee benefits, EPLI, and administrative costs. At PEPM, setup costs and employee sharing depend solely on negotiation. “Because both are very soft numbers, employers have no way of knowing if these costs are reasonable”, said Derek. It’s also hard to gauge what reasonable pricing looks like for a company of your specific size, industry, and region.
- Health Insurance Flexibility they offers various types of insurance. However, all of them come from one or two operators selected by the PEO. Employees and companies cannot find out which operator PEO works with and limit to the package selected by PEO. Say you really want to get an offer of a package from United HealthCare and your PEO only offers a package from Aetna. You are stuck with PEO. If tariff flexibility and provider choice are important to you, an independent health insurance broker may be a better fit.
- Customer Service PEO supports multiple employees, so customer service can feel a little impersonal. Questions usually direct to different representatives so you don’t have a dedicated person to support you and your team.
- Easy-to-use PEOs have been around for decades, but the technology is usually less modern. For example, things like customizing reports may require additional assistance and may take weeks to update. RIEs often use different systems to manage salaries and benefits.
Now that you know what to look for, it is time to weigh your options. If you’re a small or medium-sized business and haven’t thought about PEO health coverage with Genesis HR, read on to find out what it’s all about – and exactly how Genesis can help you!