Providing high quality health insurance to your employees keeps them engaged and on staff. Employees are more likely to stay with an employer if they provide valuable health coverage. However, as a small business owner, you know the financial burden placed on you by offering competitive benefits. At the same time, if you do not provide healthcare, you risk losing high-quality employees.
Working with the right Professional Employer Organization (PEO) can close allows your business to provide top-notch healthcare at affordable prices. No agent, broker, or insurance carrier can claim to be able to do that.
The question arises: how is this possible?
What is so special about PEOS?
Group Health Insurance Costs More for Small Businesses
Insurance companies base premiums on their risk. The smaller number of insured people in the risk pool, the larger the financial risk to the insurance company. This increases premiums.
When your small business tries to offer group health insurance coverage, your risk pool might be extremely small, unlike with much larger corporations. This could cause the insurance company to keep premiums high for your employees which might deter them from taking coverage at all. If they take the coverage, you are stuck paying higher-than-average premiums.
PEOs Lower Health Insurance Premiums
When you partner with a PEO you can offer high-quality health coverage at the same price that large companies get. This is possible because a PEO partnership entails the PEO becoming the employee's employer of record. This means that all of your employees plus all of the employees of the other clients of the PEO are pooled together to lower the risk pool for the insurance company. The end result is high quality healthcare options at reduced costs to you.
This co-employment process takes administrative burdens off your shoulders while reducing the cost of premiums. When your PEO becomes the employer of record for your employees, the PEO can provide them with certain benefits, like healthcare, on your behalf. Through this arrangement, you can offer your employees what they want — high-quality healthcare — at a cost you can afford.
Co-Employment is Not a Loss of Control
Some small business owners want to stay away from any co-employment relationship because they think it means they lose control over their employees.
This is not the case.
The PEO you choose takes responsibility for filing payroll taxes, administering payroll, keeping your business compliant, and administering your health benefits.
Your ability to hire, fire, discipline, and direct your employees remains solely in your control. You do not lose any day-to-day operational control of your business with a PEO. The only tangible difference is that you no longer have to worry about certain HR administration tasks such as remitting payroll taxes.
PEOs Provide Solutions
A co-employment relationship with your PEO has myriad benefits to you and your staff. Your ability to provide your team with high-quality healthcare plan options gives them exactly what they want, all at a fraction of the cost of you offering these benefits on your own. In return, you get to attract and retain top talent in your industry.
Partnering with a PEO can save your business money by reducing the costs to provide health insurance to your employees. When your employees feel happy and cared for, they are more efficient and engaged. This creates a culture of high profitability and growth within your organization. There is a good reason that the average ROI from a PEO relationship is 27.2%.
To learn more about how a PEO can help your business, download "How PEO Co-Employment Reduces Risk and Rewards Employers."