All You Need to Know About PEO Insurance

peo insurance

Do you find yourself struggling with the choices of which employee benefits and insurance to offer your small business? You’re not alone. But what if there is such a thing as PEO insurance provided by Professional Employer Organizations? Therefore, let me take you through this blog and give you all the details about PEO Insurance.  

Dive in!  

About PEO Health Insurance   

PEO insurance is not a type of insurance but a service provided by Professional Employer Organizations (PEOs). PEOs work in cooperation with your employees, assuming some of the responsibilities of an employer, such as payment of wages, record keeping, and, most crucially, providing benefits. In the case of PEO Insurance, they use their many employees to bargain for better insurance prices.   

How Does PEO Impact Health Insurance Cost?   

Health insurance is often a significant expense for small businesses. Here’s a breakdown of how PEOs can potentially lower your health insurance costs:  

  • Group Buying Power  

As mentioned earlier, PEOs purchase insurance policies from insurance brokers on behalf of the member companies as one large employer. This puts them in a better position to negotiate for better and more favorable rates in the marketplace.  

  • Administrative Savings  

PEOs handle the management of your health insurance plan, which implies that you are relieved of the responsibilities of enrollment, billing, and claims. This can help your business save a lot of time and money in the long run and give you an edge over your competitors.  

  • Reduced Risk Pool Fluctuation  

This is especially so because, with a large population of insured people under their umbrella, PEOs can quickly reduce the effects of most health claims on premiums.  

How Does a PEO Health Insurance Help?  

Partnering with a PEO offers several advantages, including access to PEO insurance as an employee benefit. PEO health insurance specifically can bring significant value to your business in a few ways…  

  • Compliance  

Ensuring your global team has proper insurance can be a complex task. Compliance involves internal factors like HR and legal expertise and navigating the specific regulations of each country in which you operate. This can create a significant hurdle for international businesses. Partnering with a global PEO (Professional Employer Organization) streamlines this process. They handle compliance with local insurance laws while offering your international team access to high-quality health insurance plans.  

  • Cost Saving on Health Insurance  

PEOs, or Professional Employer Organisations, can provide considerable discounts on health insurance for your employees. This is because PEOs serve as the “sponsor” of their clients’ health plans. 

Since a global PEO works with many clients simultaneously, they have a larger pool of employees to insure. This increased purchasing power makes them more attractive to insurance brokers.  

  • Employer of Record  

An Employer of Record (EOR) serves as a legal employer for your worldwide workforce, taking on obligations traditionally handled by your company’s human resources department. This involves administering payroll chores, withholding payroll taxes and employee contributions, and resolving issues such as terminations. Outsourcing these tasks to an EOR may improve your global labor management. 

  • Reduce Carrier Risks  

PEOs provide a major benefit in controlling insurance risk. The PEO healthcare provider manages everything from coverage selection to yearly renewals. This guarantees that the PEO carries the responsibility of addressing carrier risks and complexity rather than the business owner. 

Prerequisites Requirements for PEO Health Insurance  

This section describes the health insurance documents necessary for organizations that deal with a Professional Employer Organisation (PEO) and its leased workers. 

Employer Duties:  

  • Complete PEO Healthcare Provider Documentation:  
  • Employee details for the Certificate of Insurance (COI)  
  • Excess liability coverage extends to the employer’s liability policy  
  • Details on your existing employer’s liability and workers’ compensation coverage  
  • Description of your operations section in the COI  
  • Employer’s liability waiver and workers’ compensation waiver of subrogation endorsement (if applicable)  
  • Any alternate employer endorsements for employees  
  • Any other miscellaneous details requested by the PEO  

Leased Employee and Contractor Requirements:  

  • Minimum Premium Policy (MPP): The PEO will likely provide details about the minimum premium policy.  
  • Certificate of Insurance (COI): The PEO will issue this document.  

Health Insurance Broker, PEO, or Both?   

In the end, selecting the proper structure for employee benefits can be a daunting task. Health insurance brokers provide knowledge about plans, while PEOs provide integrated HR solutions, including insurance. Consider your needs.  

However, if all you need is guidance with the strategy, a broker is the ideal option. If you want an all-in-one HR solution with the potential for cheaper insurance rates, a PEO may be right for you. The ideal strategy is to work with a broker to select the best PEO plan and then hire a PEO to manage it. 

Contact us for any help regarding PEOs!  

About Us

Being a full-service professional employer organization (PEO), we provide employment-related services, such as employee benefits, human resources, risk management and payroll. We also offer ongoing supervisory training to employees regarding employment laws, procedures and policies.

We are social 24/7 - Get in touch