Offering health insurance is a key factor to attract and retain key employees, but determining the best health insurance strategy for a small business can be daunting for a business owner.
Managing Health Benefits Costs with a PEO
Under a PEO partnership, small businesses have a huge advantage in finding competitive health insurance plans, because PEO clients leverage the buying power of a much larger pool of worksite employees. PEOs also have access to more product offerings they can make available to their small business partners.
According to The National Association of Professional Employer Organizations (NAPEO), small businesses have enjoyed significant health insurance savings as much as 63%, as compared to not partnering with a PEO. In addition to the savings, companies were able to offer a wider range of health benefit options to their employees.
Setting Up Health Benefits without a PEO
- You have to figure out how you’ll procure insurance —with limited options. Essentially, you have three options for finding health insurance coverage in the small group market: Purchase from a broker, a health insurance carrier, or the open market (called different things in different states). Your small business does not have access to—or simply can’t afford—many of the more robust insurance plans offered to larger companies.
- You have limited-to-no support for education using any of these three DIY options. Brokers may offer limited education, but if you buy direct, there’s no one on the insurance side to help your employees make well-informed decisions. There’s also no advocate. So should an employee have a problem with an insurance claim, etc., they are on their own to navigate the process.
- You have limited insight into how the health insurance plans will change from year to year. You won’t find out what the new plan will cost you and your employees until the time comes to renew and enroll—and you don’t have an advocate to help you plan for increases in the future. This annual change is frustrating to you and to your employees, many of whom view health insurance as the most important benefit.
Setting Up Health Benefits with a PEO Partner
- You have access to the PEO health insurance carriers—which means you have better (and more!) options. Under a PEO partnership, small businesses have a huge advantage in finding competitive health insurance plans, because the PEO selects a carrier or carriers. PEOs also have access to more product offerings they can make available to their small business partners. Arguably the products are best in class.
- You don’t have to deal with health insurance administration headaches. No more getting fed up thinking, “There’s got to be a better way to do this.” This is it! With a PEO option, you’ll find not only a better product, but an easier way to manage health insurance costs and administration.
- The PEO manages the entire carrier relationship. A PEO will handle renewals, open enrollment, employee education, onboarding, and even advocate for your employees if there’s a claim issue.
- You get help planning for annual changes. Generally speaking, PEOs are well versed at managing a large group health insurance plan. Because health insurance management is such a large part of the PEO business, it’s important to minimize surprises, and have a pulse on how the plan is running.
- Your employees will be more satisfied with their options. PEO health insurance benefits add value to your employees’ lives. This benefit is arguably the most important. By partnering with a PEO to offer competitive health insurance coverage, you protect the investment you make in your employees—happy, valued employees are less likely to leave your company in search of other opportunities.
For more information on Health Insurance benefits for your business, reach out to Regis HRG. We are here to manage your HR burdens, so you can get back to business.
