PEOs offer competitive benefits, career advancement for employees

In a time of spiking health costs and aging baby-boomers, and with health and security first and foremost on many Americans' lists, health insurance and retirement programs are becoming more and more important to employees and employers alike.

For a small employer, a good benefits package can be one of the best ways to attract and keep good employees. Job candidates usually weigh job offers based on three aspects: career advancement opportunities, pay, and benefits. In a small company, career advancement may be limited and the company may not be able to match the salary offered by a larger competitor. That makes the benefits package all the more important.

Your company can select and administer insurance and other benefits programs in-house, but many small businesses find it more cost-effective to use professional employer organization services for all or part of the process. Specialized services can help you find the most affordable insurance, compare and double-check vendors’ terms, and manage enrollment and ongoing administration of those programs.

Be forewarned the array of companies and consultants that want your benefits business can make your head spin. To simplify, we can divide them into two categories.

Brokers

One type of benefits outsourcing service goes by a variety of names: benefits broker, human resources consultant, insurance agent, insurance company, financial adviser. But behind the fancy labels, they are all basically insurance or investment brokers.
A good broker will explain various health insurance options and suggest the best ways to save money while still providing good insurance to your employees. Insurers will look at your employees’ risk profiles, as well as how they use health care, and will raise your rates accordingly. That’s where a broker can examine an underwriter’s evaluation and challenge it if it doesn’t look fair.

HROs

This partner is called the human resource organization. Also called an administrative service organization or business process outsourcer, this company provides HR administrative functions. Rather than sell the actual insurance or financial products, this is the partner that is connected to brokers who can obtain those products. For example, an HRO would administer open enrollment for health insurance and flexible spending account programs.

An HRO often provides a self-service web portal that allows employees to find information on their health and retirement programs, download forms, change account information, and handle other administrative details. An HRO can also do background checks and/or drug screening on potential hires. In addition, it usually offers compliance help, everything from providing posters required at a worksite to providing an e-mail service that alerts you to changes in state regulations.

Look to a competent PEO, or professional employer organization to aid you and your employees with a much more competitive benefits and pay package, so you can concentrate on your company's overall vision.