Our PEO Solution… is not a PEO…

by | Apr 19, 2022 | HRIS & Benefits Administration

What is a PEO?

A lot of small to mid-sized employers lack the internal workforce & knowledge needed to manage their employee population so they outsource the task to firms called Professional Employer Organizations (PEO). In large, PEO’s proved a suitable service that manages a company’s hiring/ onboarding, payroll processing, employment taxes, workers compensation insurance and group health benefits. These PEO services provide value to newer or understaffed companies by taking the workload of these tasks off management’s plate, allowing them to focus on growing their businesses.

What are the costs associated with a PEO? 

  • PEO’s require the partnering company to sign their employee population over to the PEO. In return, the company then has to “rent” their own employees from the PEO partner for a Per Employee Per Month (PEPM) cost.
  • The yearly cost to manage an employee is around $1,500-$2,000 per year, per employee; not including the costs of other services such as payroll, benefits administration, workers compensation, or tax services provided through the PEO.
  • PEO’s are also advantageous in tying profits in all the services they provide like the ones listed above. The cost of these services typically is not itemized, allowing the PEO to increase margins as they wish without raising red flags.
  • On top of the PEPM cost to “rent” employees & fees for services provided, employers must also contribute dollars to the cost of the benefit programs employees enroll into.
  • The cost of each benefit program provided is based upon the entire “pool” of employees the PEO manages. This means that benefit rates are based upon the claims & demographic. information of the entire PEO population, not an individual company’s employee population.
  • As the average age & claims increase for a PEO’s population, so do the benefit renewal rates for each company held under the PEO, even if their population is comprised of young, healthy individuals.
  • PEO’s also distribute rate increases as the wish, on a group to group basis. These increases do not have to represent the portion of claims an individual group is responsble for. 

Questions to ask before using PEO:

If you are currently utilizing a PEO’s services or are considering using one, there are a few questions that must be answered to justify your decision.

  1. How do PEO’s efficiently manage thousands of employees and hundreds of companies at once?
  2. How much time does it take for a PEO to completely process an employee?
  3. How much are these services worth? Is there a cheaper alternative to the price tag of a PEO?
  4. Are there any PEO alternatives that automate these processes without sacrificing mine or my staff’s time?

The AegisComplete Alternative 

At AegisInsure, we have created a program that gives small to mid-sized employers the power to manage their own employee population without increasing the management workload. Our solution comes in at a fraction of the cost a standard PEO charges, allowing companies to save an average of $3,000/ year per employee.

How we did it 

We did this by answering the four basic questions above.

1. How do PEO’s efficiently manage thousands of employees and hundreds of companies at once? 

PEO’s efficiently manage hundreds of companies by operating on a fully integrated Human Resource Information System (HRIS). This system includes multiple components such as payroll software, a benefit administration system, and a database for employee information. All components of the system integrate to share and store common information. The end goal of our AegisComplete Consulting Program is to implement technologies & service providers that integrate and operate seamlessly as one fully integrated HRIS system. This gives our clients the tools and resources needed to manage their own employee population with confidence.   ate and communicate with one another to transfer information seamlessly and automate virtually every federally regulated reporting requirement that companies face.

2. How much time does it take for a PEO to completely process an employee? 

PEO’s can onboard & terminate employees with the click of a button. One PEO employee has the capability of managing hundreds of companies & thousands of employees.

3. How much are PEO services worth? Is there a cheaper alternative to the price tag of a PEO? 

These services are valuable, especially to a business owner that lacks the time, staff or knowledge needed to navigate the complexities of managing an employee population. Being able to accomplish these tasks independently greatly increases a company’s bottom line & provides the internal infrastructure needed for long-term success and growth. Creating a fully integrated HRIS can be a daunting task on your own, but with the proper consultant this can easily be achieved, resulting in SUBSTANTIAL SAVINGS over the years!

4. Are there any PEO alternatives that automate these processes without sacrificing mine or my staff’s time?  

Through proper consulting, companies can internally automate all the processes PEO’s handle by implementing a fully integrated HRIS system of their own. Once implemented, the task of onboarding & ongoing employee management takes the same amount of time it would to relay information to PEO a representative.

 

THE END GOAL

The end goal of our AegisComplete Consulting Program is to implement technologies & service providers that integrate and operate seamlessly as one fully integrated HRIS system. This gives our clients the tools and resources needed to manage their own employee population with confidence.

  1. HRIS & Benefit Administration Consulting 

The first step in our process is to get all company and employee information built out in our HRIS & benefit administration system. Our HRIS serves as the core vessel to automating processes and storing information.

2. Payroll Service Consulting   

After importing & building all company information in our HRIS, we help your company evaluate all the payroll service providers that integrate with our HRIS. Our system integrates with 15+ payroll providers, allowing your company to choose the service & price that best fits your company’s needs. Our payroll partners handle the employment tax withholding and filings, so you don’t have to worry about it!

3. Group Benefits Consulting  

Benefits consulting is one of the core offerings AegisInsure was founded on. Our team of benefit experts help you structure a benefits program that fits all the needs of your employee population. We work with a variety of carriers for group medical, ancillary, voluntary, CHDP, and digital healthcare benefits. Our carrier & cobra partners all fully integrate with our HRIS & benefit administration system, allowing eligibility & enrollment information to transfer seamlessly between your company and your carriers, taking the workload off your plate!

4. Compliance Audit 

After transitioning into your new benefits program, our team of compliance specialists evaluate your newly offered benefits and your employee count to determine the exact requirements needed to stay in compliance with federal and state regulations. Whether it’s COBRA, ACA, Section 125 plans, ERISA requirements or Form 5500 filings, our compliance team has you covered!

5. Workers Compensation Consulting  

The last component needed to seamlessly make the switch from a PEO is workers compensation insurance. Our insurance experts will evaluate and propose the exact protection amount needed for your workforce to make sure you’re adequately covered.

6. Open Enrollment Support

As yearly Open Enrollment (OE) approaches, our enrollment specialists help you plan out the OE period & draft OE educational materials for your employee population such as enrollment booklets and videos explaining benefits & the enrollment process.