by Admin. | Aug 23, 2019 | group health insurance, healthcare, PEO, Small Business Group Health
The number of small and medium-sized employers using professional employer organizations (PEO) continues to increase each year. Often, it is thought that the growth of the PEO industry is due mainly to the benefits business owners see from this partnership. However, owners aren’t the only ones who gain from working with a PEO.
Small business employees, too, stand to benefit from the services and solutions offered by PEOs today. Let’s take a look at a few examples of the positive outcomes that small business workers see when their employer works with a PEO.
1. Better Benefits
One of the most well-known advantages to using a PEO is gaining improved, modern benefits and perks. And while better benefits help employers retain and recruit talent, these enhanced perks often provide even greater for employees.
When working with a PEO, employees are given access to a wide-variety of personalized benefits, including:
- Health insurance
- Retirement benefits
- Voluntary benefits (pet insurance, identity theft protection, financial and legal programs, telehealth programs, etc.)
- Complimentary benefits (discount programs, employee assistance programs, etc.)
By having solid HR policies, a comprehensive benefit package, and employee perks, you are able to create a safe and happy workplace that helps you attract quality employees and retain them to reduce the cost of turnover.
2. Workers’ Compensation Savings
Over the last few years, the workers’ compensation market has gotten a lot tougher for business owners. PEOs help businesses secure competitive rates for workers’ compensation insurance. That can sometimes be challenging for start-up companies, companies with past losses or those with high-risk jobs. PEOs have flexible workers’ compensation programs with more affordable rates than stand-alone policies and staff who help manage the cost of claims, coordinate return-to-work programs and recommend safety training
In most cases, it will be a more cost effective option than the traditional market can offer. We can also include Employment Practices Liability insurance which covers lawsuits arising from wrongful termination, discrimination, and sexual harassment. Issues that are becoming more common in today’s workplace.
3. Solve HR Issues
Federal, state and local regulations related to HR are more voluminous and complex than ever. Most businesses don’t have the staff for the in-depth subject matter expertise needed to adequately navigate wage and hour regulations and ensure compliance with the full range of employment and tax laws. When small and mid-sized businesses work with a PEO, they get a team of compliance experts who stay current with all the rules and regulations that apply to employers.
A PEO also helps manage HR risk by helping clients:
- Create an employee handbook to include anti-discrimination and harassment policies
- Familiarize themselves with wage and hour laws
- Pay employees in accordance with the law
- Pay employees in a timely manner
4. Compliance Relief
PEOs are responsible for staying up-to-date on the latest federal and state labor laws and regulations. This not only saves you time, but also the frustration that comes with trying to make sense of and implement many of these changes.
By staying up-to-date on these changes, you can avoid hefty fines and disgruntled employees.
5. Modern HR Tech
This desire for modern technology has also become an expectation for HR tasks that employees are asked to perform, such as requesting PTO, going through benefit enrollment, and submitted their hours.
The majority of PEOs offer their clients the kind of HR tech that employees want and need. Some even have mobile apps that make tasks as simple as possible for employees!
And most PEOs, through their HR technology, can offer small business employees learning and development programs and software that much larger organizations use.
A great HRIS System is fundamental today. By meeting employee expectations, employers help boost the happiness and ultimately retention of their workforce.
6. Employee Happiness
Enhanced benefits, robust learning and development programs, and easy-to-use, modern technology all help to boost the employee experience.
For employees, increased happiness makes their connection to their work and employer greater. And for employers, happy employees mean improved productivity and lesser chance of turnover – studies from the National Association of Professional Employer Organizations (NAPEO) have shown that PEOs help their clients reduce turnover by 10% to 14%.
A happier workplace and workforce are good outcomes for everyone and working with a PEO can help achieve these goals!
7. Competitive Business and Personal PEO Insurance Quotes
Millennium Medical Solutions Corp can also provide competitive quotes on all of your personal insurance needs. We work with several industry partners to help clients find coverage for many commercial lines of insurance, such as Group Long Term Care Insurance, Executive Benefits, General Liability, Property, and Commercial Auto.
We also offer personal lines insurance such as renter’s policies, home insurance, and life insurance.
Learn how our PEO Partnership can help your group please contact us at info@medicalsolutionscorp.com or (855)667-4621.
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by Admin. | Jul 24, 2019 | PEO
PEO - What are the stats? Industry statistics.
- The 3.7 million Worksite Employees employed by PEOs earned a total of $176 billion.
- They represent 15 percent of all employment by private sector employers that have 10 to 99 employees (chosen because this is the size range of most PEO clients) and 2.4 percent of civilian employment in the United States.
- Between 2008 and 2017, the number of Worksite-Employees employed in the PEO industry grew at a compounded annual rate of 8.3 percent. This is roughly 14 times higher than the compounded annual growth rate of employment in the economy overall during the same period.
- The total employment represented by the PEO industry is roughly the same as the combined number of employees for Walmart (United States only), Amazon, IBM, FedEx, Starbucks, AT&T, Wells Fargo, Apple, and Google. Those companies include the two largest retailers, the largest technology company, the largest transportation company, the largest telecommunications provider, the largest financial services firm, the largest specialty restaurant chain, plus the two most highly valued firms in the world based on stock market valuation.
Key Findings
- Businesses in a PEO arrangement grow 7-9 percent faster, have 10-14 percent lower turnover, and are 50 percent less likely to go out of business.
- PEOs are able to offer a broad array of HR services at a lower cost, and offer access to retirement plans to small businesses that may not otherwise sponsor them.
- PEOs provide services to 175,000 small and mid-sized businesses, employing 3.7 million people.
- There are 907 PEOs in the U.S.
- Administrative costs are around $450 lower per employee for businesses that use a PEO.
What is Co-Emplyment
The PEO relationship involves a contractual allocation and sharing of certain employer responsibilities between the PEO and the client, as delineated in a contract typically called a client service agreement (CSA).
For the obligations a PEO agrees to take on with respect to its clients, the PEO assumes specific employer rights, responsibilities, and risks through the establishment and maintenance of a relationship with the workers of the client. More specifically, a PEO establishes a contractual relationship with its clients whereby the PEO:
- May assume certain employment responsibilities for specified purposes regarding the workers at the client locations.
- May reserve a right of direction and control of the employees with respect to particular matters.
- Shares or allocates employment responsibilities with the client in a manner consistent with the client maintaining its responsibility for its product or service.
- Remits wages and withholdings of the client’s workers.
- Issues Form W-2s for the compensation paid under its Employer Identification Number.
- Reports, collects and deposits employment taxes with local, state and federal authorities.
A PEO provides integrated services to effectively manage critical human resource responsibilities and employer risks for clients. A PEO delivers these services by establishing relationships with the client’s employees and administering certain employer rights, responsibilities, and risks as agreed with the client.
The roles of the PEO and the client depend upon the facts and circumstances of each relationship — that is, each obligation should be examined individually as employment responsibilities are assigned in the parties’ CSA. Each party will be responsible for certain obligations of employment, while both parties might share responsibility for other obligations and be “an” employer, but neither party is “the” employer for all purposes.
Both the PEO and the client company establish a relationship with worksite employees. The PEO might engage with worksite employees with respect to specific matters involving human resource management and compliance with employment requirements, while the client company directs and controls worksite employees in the client’s day-to-day operations as well as the manufacturing, production, and delivery of its products and services.
The client company provides worksite employees with the tools, instruments, and places to work. Some PEOs provide assistance and suggestions to clients when it comes to offering worksite employees a workplace that is safe, conducive to productivity and operated with best practices with employment rules and regulations. Additionally, the PEO assists clients and worksite employees with workers’ compensation insurance and a broad range of employee benefits programs.
PEOs create a real relationship with worksite employees over certain matters. This relationship exists in fact, not just in form. PEOs often assist with the risks attendant to the personnel functions of the worksite employees. PEOs manage liabilities by monitoring new employment trends and requirements and developing policies and procedures for their clients and the worksite employees, as stated in the client service agreement.
*information provided by NAPEO An Economic Analysis: The PEO Industry Footprint in 2018 Whitepaper. https://www.napeo.org/
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by Admin. | May 10, 2018 | group health insurance, HR, PEO, Small Business Group Health
Survey Shows 94% of PEOs Expect an Increase in Employees
Businessman pressing a People concept button.
Professional Employer Organizations (PEO) growth doesn’t appear to be slowing down. Earlier this year, NAPEO released the results from there 2017 Q3 Industry Pulse Survey. The findings showed that PEOs are continuing to grow, and at an impressive pace. In the report, 72% of PEOs reported revenue growth in Q3 of 2017, compared to Q3 of 2016.
With all that is happening with employment laws, healthcare and health insurance, and other areas of HR that impact small and medium-sized businesses (SMBs), it is easy to see why PEOs and other HR outsourcing options are seeing, in many cases, rapid industry growth.
Now, NAPEOs latest Quarterly Pulse Survey, which compared the 4th quarter of 2017 to the 4th quarter of 2016, shows that PEO growth is still occurring, and will almost certainly continue in 2018 and beyond.
DATA FROM THE 2017 Q4 NAPEO PULSE SURVEY
The NAPEO Quarterly Pulse Survey – Q4 2017 was conducted in early 2018, and was taken by 32 PEO executives.
The first result from the survey looked at PEO revenue. 71.9% of PEO executives said their organization’s revenue increased in Q4 of 2017, compared to Q4 of 2016.
Broken down further, 50% said that revenue increased somewhat, and 21.9% said revenue increased significantly.
Next, the survey showed that PEOs experienced an increase in the average annual wage per worksite employee (WSE), with 65.5% of executives responding.
NAPEO’s findings also revealed that 66% of PEOs saw an increase in gross profit. Of this 66%, 43.3% said gross profit increased somewhat, while 23.3% said it increased significantly.
OPERATING INCOME, NUMBER OF CLIENTS, AND WSE PROJECTION DATA
The next group of results from the survey uncovered data around operating income, the number of clients, and worksite employee projection information.
First, the report showed that 65.7% of PEO executives reported an increase in operating income in the 4th quarter of 2017, compared to the 4th quarter of 2016. The 65.7% can be broken down further, with 43.8% saying that operating income increased somewhat, and 21.9% increasing significantly.
Next, 59.4% of PEOs said that the number of clients increased, while 31.3% said that the number of clients stayed about the same. Of the 59.4%, 50% said that clients increased somewhat, and 9.4% said clients increased significantly.
Lastly, the survey asked PEO executives about worksite employee (WSE) projections over the next 12 months.
Perhaps the most promising and impressive statistic found in the quarterly survey, almost 94% expect WSEs to increase. Here is the full breakdown:
- 71% expect EE to increase somewhat
- 22.6% expect EE to increase significantly
- 3.2% expect EE to stay about the same
- 3.2% expect EE to decrease somewhat
With PEOs seeing an increase in revenue throughout 2017, and executives overwhelmingly expecting EE to increase over the next 12 months, revenue outlooks for the rest of 2018 and into 2019 look extremely promising throughout the PEO industry.
PROFESSIONAL EMPLOYER ORGANIZATIONS CONTINUE TO THRIVE
Much like the last few Quarterly Pulse Surveys from NAPEO, the 2017 Q4 survey shows that despite all of the uncertainty and complexity with various areas of HR, PEOs continue to grow.
Regarding the survey, Pat Cleary, President & CEO of NAPEO, said, “This is just the latest example that more and more business owners are realizing the true value of using a PEO. Surveys and studies consistently show that using a PEO is good for a business and its employees. PEOs provide a real benefit to businesses by providing HR services and solutions that they would otherwise be unable to afford.”
Some additional findings from the survey include:
- Average annual wage per WSE increased somewhat
- Average number of WSEs per client company stayed about the same
- Number of internal employees (including salespeople) stayed about the same
- Number of Worker’s Compensation claims reported to carrier stayed about the same
The survey also revealed that the average PEO has 19 worksite employees per client.
What’s the difference between co-employment and employee leasing? PEO and Employee Leasing. What’s the Difference.
Learn how a PEO can help grow your business. Check out PEO Case Studies here and learn how they can apply to you.
Click below for a free PEO assessment. Our PEO Quoting Tool ensures that we have first-hand insight as to what the small business owner needs to be successful.
by Admin. | Feb 15, 2018 | HR, PEO, Small Business Group Health
Case Study: Law Firm and PEO Solution
Professional Services: New York Law Firm’s Benefit Benchmark Study Reveals Gap In Offerings
A law firm with a benefit offering below the New York law firm benchmark, no HR person on staff, no formal recruitment strategy and no employee development plan was struggling to attract top lawyers and paralegals, and to keep top producers. This was affecting their stability, employee morale, and ultimately, their bottom line. After losing one of their highest billing attorneys and a key associate to a larger firm with more robust benefit offerings, they realized they needed to make an immediate and drastic change to recruit and retain quality employees.
SOLUTION
Our PEO partner immediately assigned a seasoned Human Resources Manager with vast experience working with law firms to help, and conducted a market analysis of other firms in the area. After establishing a benchmark, the PEO developed an innovative employee benefits program that rivals top law firms in the area. Our PEO partner then devised a recruitment and retention strategy designed to reposition the firm in the marketplace.
RESULT
The firm now offers benefits and employee development that are on par with their top competitors. They have a clear plan on how to increase employee satisfaction and retain quality people while attracting top new talent. Their turnover has reduced significantly, and employees shared positive feedback during and after their benefit enrollment meetings via employee satisfaction and engagement surveys. Leadership can now focus on clients and on growing the firm.
Click below for a free PEO assessment. Our PEO Quoting Tool ensures that we have first-hand insight as to what the small business owner needs to be successful.
Contact Us Now Learn how our Agency is helping buinsesses thrive in today’s economy. Please contact us at info@medicalsolutionscorp.com or (855)667-4621.
PEO: Co-Employment
by Admin. | Jun 14, 2017 | group health insurance, NY News, PEO, Small Business Group Health
HealthPass Adds Oscar
HealthPass New York will start offering OSCAR Health Plans effective Sept 1, 2017 to small employers. Oscar will offer eight plans with varying benefits package with 1 to 100 employees. The plans are available to small businesses located in New York City, Long Island, Westchester and Rockland counties. NJ residents can also access Hospitals & physicians through the NJ Qualcare PPO Network
HealthPass New York, a private insurance exchange for small employers. The addition of Oscar gives small businesses access to 3 health networks – Oxford, CareConnect and Oscar. Also, Guardian is the insurer of record for the ancillary benefits comprising dental, vision, life insurance, disability and accident insurance
Oscar entered the NY market on Jan 1, 2014 and had around 16,000 members. In 2015, it expanded coverage to New Jersey and grew to about 40,000 members. In 2016, Oscar had 145,000 members in New York, New Jersey, California, and Texas. Oscar’s cutting edge technology and pioneering benefits have simplified the consumer health insurance experience propelled easier access and understanding of health plans. Examples of success have been ease of physician locator, online appointment setting and no cost telemedicine 24/7. Additionally, some plans have $0 Copay generics and annual 3 free office visits
Why a Private Exchange? The advantage of a Private Exchange is the ability to empower employees with choice. Much like a 401K your employees can use a defined contribution allocation for benefits. As affordable health plan networks are increasingly smaller with specific coverage areas the one size show for all approach to benefits no longer works.
Is a Private Exchange Right For My Group?
If you’re a small business owner who has concerns about payroll, filing paperwork, and complying with government regulations, co-employment may be the service you’ve been looking for. In some cases, a Private Exchange may NOT be right for you. With Health Care Reform your company may qualify for a small business tax credit or a be eligible for a large group discount under a PEO.
Try us on a custom demo, contact us at (855)667-4621.
by Admin. | Jan 20, 2017 | PEO, Small Business Group Health
No Tax Restarts
No need to wait till next Jan 1st to make changes. No tax restarts are good news for PEO prospective groups. Federal Tax Restarts Are No Longer An Issue The significant added expense of having to pay tax restarts often postponed or ended the PEO conversation for many of our prospective clients. It was an important consideration since companies were not eligible for tax restart credits and the cost of the restarts often diminished the financial value proposition of partnering with a PEO.
Example: A group starting a plan in May would have to pay for annual FICA and FUTA all over again with new PEO. A PEO is considered a different employer group.
Moving forward, there are no federal tax restarts to worry about. FICA and FUTA wage bases will not restart when an employer joins a PEO. Ask us about our Quick Start Program to ensure a smooth start to our personalized PEO model, and offers perks for your staff.
Contact us to learn more about our Quick Start Program on-boarding processs but here are the high points:
- You’ll have access to the best healthcare providers, coupled with the pricing that is offered to much larger companies.
- Your Worker’s Compensation rate may favorably adjust since you will be “adopted” under the PEO and their typically much better rates.
- You’ll have a partner that will help build systems for recruiting, hiring, employee administration and more.
- You’ll also have experts who will work with you to establish and maintain policies and programs, including workplace safety, sexual harassment, diversity and others that are typically required by law.
While this certainly is not going to fix everything in the ever growing PEO industry, it’s a huge leap forward and offers clarity. If you would like to explore how a PEO can help your company, contact us and we will be happy to help you.
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