Regarding benefits administration, what access does a PEO have to rates and plans that would outshine what our local reps provide? 

A PEO can often provide more competitive benefits packages compared to what a local broker or HR team can offer, primarily due to its ability to leverage economies of scale. Here’s how a PEO's access to rates and plans may outshine what local reps provide:

𝟭. 𝗚𝗿𝗼𝘂𝗽 𝗕𝘂𝘆𝗶𝗻𝗴 𝗣𝗼𝘄𝗲𝗿

Leverage of a Larger Pool: PEOs pool employees from all their client companies into a single, large group, allowing them to negotiate lower rates for benefits like health insurance, retirement plans, and other perks. This can lead to significantly lower premiums and better coverage compared to what smaller businesses could negotiate on their own through local brokers.

More Comprehensive Plans: Due to the larger size of their employee pool, PEOs can offer access to comprehensive benefits packages that include more diverse health plan options, dental and vision coverage, wellness programs, and even unique perks like mental health services or flexible spending accounts.

𝟮. 𝗔𝗰𝗰𝗲𝘀𝘀 𝘁𝗼 𝗡𝗮𝘁𝗶𝗼𝗻𝗮𝗹 𝗖𝗮𝗿𝗿𝗶𝗲𝗿𝘀

National Relationships: PEOs often work with large, national insurance carriers, which gives them access to plans that may not be available through smaller, local brokers. These national relationships allow PEOs to provide competitive benefits across multiple regions, which can be especially valuable if your business has employees in different states or is planning to expand.

Preferred Pricing: Due to their long-standing relationships with major insurers, PEOs can secure preferred pricing and exclusive plans that smaller, local brokers may not have access to.

𝟯. 𝗕𝗿𝗼𝗮𝗱𝗲𝗿 𝗥𝗮𝗻𝗴𝗲 𝗼𝗳 𝗕𝗲𝗻𝗲𝗳𝗶𝘁𝘀

More Robust Offerings: PEOs typically offer a wider range of employee benefits, including health, dental, vision, 401(k) retirement plans, life insurance, disability insurance, and even voluntary benefits such as legal services, pet insurance, and employee assistance programs (EAPs). These offerings might outshine what your local rep can provide simply due to the scale of options and resources.

Customizable Plans: Many PEOs can customize benefit packages to suit the needs of various employee groups within your company, allowing you to offer different tiers of benefits that can attract and retain top talent.

𝟰. 𝗖𝗼𝗺𝗽𝗹𝗶𝗮𝗻𝗰𝗲 𝗮𝗻𝗱 𝗔𝗱𝗺𝗶𝗻𝗶𝘀𝘁𝗿𝗮𝘁𝗶𝗼𝗻

Compliance Expertise: A PEO handles all the administrative work associated with benefits, including staying up-to-date with complex healthcare laws like the Affordable Care Act (ACA). This reduces the compliance burden on your local HR team. PEOs also ensure that the benefits packages comply with federal and state regulations, reducing the risk of penalties.

Streamlined Enrollment and Management: PEOs often provide advanced benefits administration platforms that make it easier for employees to enroll in plans, manage their coverage, and access support. These systems can be more sophisticated than what local brokers might offer, streamlining everything from enrollment to claims assistance.

𝟱. 𝗖𝗼𝘀𝘁 𝗦𝘁𝗮𝗯𝗶𝗹𝗶𝘁𝘆

Rate Stability: Due to their size and bargaining power, PEOs can often negotiate more stable rates over time, which may protect your business from sharp premium increases. Local brokers may face more volatility in pricing, especially for smaller companies, where a few claims could significantly impact renewal rates.

Experience-Rated Plans: Some PEOs offer experience-rated plans, where the overall health of the larger pool (and not just your specific group) is factored into rate negotiations. This can result in more favorable premium adjustments over time, especially if your company has a smaller or aging workforce.

𝟲. 𝗘𝗻𝗵𝗮𝗻𝗰𝗲𝗱 𝗘𝗺𝗽𝗹𝗼𝘆𝗲𝗲 𝗘𝘅𝗽𝗲𝗿𝗶𝗲𝗻𝗰𝗲

Superior Service and Support: PEOs often provide dedicated benefits support teams that can handle employee questions, claims issues, and complex situations, reducing the burden on your internal HR team. They can also offer access to more robust customer service through dedicated hotlines or online portals, which can improve the overall employee experience.

Educational Resources: Many PEOs also provide educational tools and materials to help employees understand and make the most of their benefits, which can lead to higher employee satisfaction and engagement.

𝟳. 𝗖𝗼𝘀𝘁 𝗘𝗳𝗳𝗶𝗰𝗶𝗲𝗻𝗰𝘆

Lower Admin Costs: The administrative burden of benefits management is absorbed by the PEO, reducing the need for in-house HR staff to handle benefits-related inquiries, paperwork, and compliance issues. This leads to cost savings and allows your HR team to focus on other strategic initiatives.

𝗖𝗼𝗺𝗽𝗮𝗿𝗶𝘀𝗼𝗻 𝘁𝗼 𝗟𝗼𝗰𝗮𝗹 𝗕𝗿𝗼𝗸𝗲𝗿𝘀:

Local brokers: Typically work with smaller groups and have access to a limited range of insurers and plans. They may provide personalized service but are often unable to match the pricing, breadth, or depth of offerings available through a PEO.

𝗣𝗘𝗢𝘀: Offer access to larger plans with better pricing, greater efficiency in administration, and more robust support systems, making them attractive for companies looking to offer competitive benefits while reducing administrative hassle.

In summary, a PEO’s access to group purchasing power, national carrier relationships, broader benefit offerings, compliance support, and rate stability often provides better rates and more comprehensive plans than local brokers can negotiate for smaller businesses.

John W Crochet

www.mpowerpartnersinc.com