Our last blog on PEOs came off as a big hit so we are giving you another installment. The PEO community has been quite successful with companies in the small group insurance market (2 to 35 employees). PEO’s are touting the one-stop shop methodology in today’s market which has attracted small business owners. In this article we want to touch on the hidden costs of a PEO company. The best way to measure out whether or not you need a PEO program or not is a matter of pricing and time savings. A client of Omega Benefit Group approached us recently asking about the PEO model. As mentioned in the recent article, “Companies need to decide from a business standpoint, looking at hard dollar and soft dollar costs, what is the best fit for their organization.” The trend is becoming companies leaving traditional health insurance programs to join a PEO thinking they will receive better rates. This may be true in the short run but companies have to look at the 3 to 5 year future to really gauge the worth of moving to one of these vendors. It’s so easy to talk about savings and planning strategies to help with this, but it’s more important to look at the exact costs and how they are impacting your business. Important questions to ask the PEO sales representative:
1. Are you billing for HR administration costs?
2. What insurance carriers are you going to for our benefits program?
3. What benefits will we be offering as a total benefit package to our employee’s?
4. Will your premiums increase mid-plan year or one time yearly?
5. Ask yourself this… Is my company too big for a PEO?
6. How are my Property & Casualty rates looking this year?
7. Do you offer an HR online system?