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Saving On Health Insurance By Using A PEO

How To Save On Health Insurance Using A PEO Service

With the rising costs of health insurance, many businesses are looking for more affordable options for their company and employees. As PEOs provide solutions for their clients, this is an avenue worth exploring.

Many businesses turn to PEOs to help save money on healthcare costs, and that is often the case. Let’s look at how a PEO can help.

Here are a few ways to save on health insurance by using a PEO:

  1. PEOs that have large group health plans can also have a big problem.  Employer groups that have experienced more claims than the average are tempted to seek out PEOs for health insurance savings.  Yet these are the very groups that a PEO doesn’t really want impacting its rates.  To compensate for this, some PEOs have found ways to charge all clients a lot more using non-transparent billing and little-explained fees, in the other areas of service to clients.  And the health insurance rates go up steeply after the first year.  If too many high-risk groups find their way into a PEO’s group plan, the carrier responds by pulling out the following year or raising rates, so that the PEO’s plan becomes less competitive.
  2. Other PEO’s have found a way to reduce clients’ costs for health insurance and HR, by simply having really strong employee benefits departments with unique offerings.  For example, Accent Employer Solutions is looking into a shared medical services program for first quarter 2019 that works through a PEO, and allows an employer easy access to providing employees and dependents with cost sharing of medical expenses modeled after the foremost Christian group medical share programs that have 30 years of successful history behind them.  Already active in 48 states, the program Accent Employer Solutions is researching is combined with another group product that provides primary doctor’s visits and prescription co-pays, along with preventative care.  This is a unique way to help employers help their employees, and it is vastly affordable.
  3. Another way a good PEO can help employers is by sourcing and administering benefits that quite simply cost the employer less money.   A strong PEO can administer them and understands them.   It can implement HSA’s paired with the right plans with multiple options, all too complicated for a small employer, but not for a PEO and its benefits technology.  The employer who finds his way to a resourceful PEO soon realizes that costs are substantially down, all because his PEO has the resources and motivation to help its clients.  Plus, the employer isn’t stuck with on-boarding employees or dependents, or with answering their questions, or with reconciling the benefits, or any of the other tasks that come with detailed administration of multiple plan offerings that produce strong savings.

How does an employer find a good PEO?

One of the best ways is to contact PEOs that are local, and this definitely includes smaller ones, not just the household names.   Visit with a knowledgeable representative on the phone, with your questions ready.  This saves time and gets you out of a lengthy face-to-face meeting until you have some basic facts first.

Ask the PEO if it offers completely transparent billing and invoicing, with all line items separated for worker’s comp, each class of employer taxes, benefits by each individual plan or product, and the PEO’s fee.  Next, ask the PEO representative how they get clients’ health insurance costs own, and what internal group products they might have.  Finally, ask the PEO what rates and fees it charges besides its HR administrative fee, including annual fees, set-up fees, employee add and delete fees, out of cycle checks and the like.  Ask the PEO what its worker’s comp rates are like compared to state manual rates for all businesses.  A PEO that prides itself on affordability, transparency, and gives some intelligent answers as to how they help clients with health costs can then be put on the list for a visit and detailed quote.  Don’t forget to check Yahoo and Google for reviews of that PEO, or anything you can find out about them that might save yourself from spending time on a partner who isn’t the right fit.

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9821 Katy Freeway, Suite 290
Houston, TX 77024

Ph: 713-468-1002
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