PEO's - Good or Bad?

[The HIC Group]

Hello All,

I've partnered up with a few national PEO's and have a few groups with them because it was in the best interest for the group. (HR Needs, WC, etc.)

What are your thoughts on PEO's and how do you think Health Care Reform will effect them?

Thanks in Advance.

 

[stuy119]

If you're placing groups with PEOs, you're losing - and so are they.

Payroll, HR, work comp, health insurance, and some other ancillary services can be acquired for much less than most PEOs charge, not to mention the "fees" they associate as a percentage of payroll.

If I were able to acquire such a list, I would pay good money per PEO client lead.

 

[The HIC Group]

Stuy


Every situation is different. Small white collar companies are perfect for PEO and the ones that I've contracted with pay the same comp or more to the brokers. I still have the relationship but no longer have any service work.

 

[stuy119]

Stuy


Every situation is different. Small white collar companies are perfect for PEO and the ones that I've contracted with pay the same comp or more to the brokers. I still have the relationship but no longer have any service work.

You're right, every situation is different. With some I can save 15% over the cost of a PEO, with some it's closer to 40%.

 

[The HIC Group]

Stu


Please don't take this the wrong way but anyone can sell on price. The better brokers sell on value.

P.S. I have placed groups with PEO's and reduced their overall bottom line hard costs including admin fees. WC, SUI, and Benefits are three cost saving areas that more than compensate for the admin fee in certain instances.
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It's always good to partner with a PEO or two.


Your group's payroll company (ADP, Paychex, etc) will most likely pitch them PEO and you will lose a percentage of those deals if you don't get out in front of it.

Make sense?

 

[stuy119]

LOL - I don't sell on price. The lower price point is just added benefit. The key point is that if one service falters, you just replace that one service.

The payroll companies I use are independent, large, and want no part of benefits. In fact, I've developed such a relationship that I get their phone calls to help them take business from the larger PEOs. Not worried about them at all.

 

[ABC]

I don't think the current PEO model will last.

The new PEO model will large group so they can get around some of the ACA issues.

The admin fees are to high for groups under 30. I don't see it as a valued option for small groups.

There will be new PEO plans being introduced by the national carriers. Those plans, if you have access to them, may be an option but they are could have tired underwriting.

 

[The HIC Group]

I don't think the current PEO model will last.

The new PEO model will large group so they can get around some of the ACA issues.

The admin fees are to high for groups under 30. I don't see it as a valued option for small groups.

There will be new PEO plans being introduced by the national carriers. Those plans, if you have access to them, may be an option but they are could have tired underwriting.

ABC,

That's interesting info. Do you have any material explaining the differences between the "old" model PEO and "new" model?

It was my understanding that all PEO's are large group. That is the main selling point. "offering fortune 500 benefits to small groups"

 

[ABC]

ABC,

That's interesting info. Do you have any material explaining the differences between the "old" model PEO and "new" model?

It was my understanding that all PEO's are large group. That is the main selling point. "offering fortune 500 benefits to small groups"

I have only had conversations will carrier reps on the new plan designs. One of them being a PEO model, which I thought i would never see from a carrier. I was flat out told they were not being developed for small group.

Admin fees are too much for a small group to absorb. Take a group of 30 lives an they have to pay $18K a year in admin fees and still have to go through some type of underwriting. Nope, I don't think that will fly. 200 lives with a ton of risk, that does not want to take on lasers on a self funded platform, maybe!

 

[stuy119]

You would be amazed at the number of PEOs that put groups into fully-insured situations rather than a comingled self-funded solution.