The large employee group constituted by multiple employers’ participation in the PEO opens up access to spectacular cost savings for employers, due to economies of scale that group buying creates.
Typically only large companies are able to gain access to the best, most cost-effective insurance plans due to their size and the negotiating power it provides. Smaller business are relegated to higher-priced, lower-quality plans because they lack the necessary bargaining power needed to negotiate with insurance carriers.
For small to medium-sized businesses to remain profitable and offer the high-quality benefits packages attractive to prospective applicants, they should consider leveraging the power of a PEO.
As a participant in Sheakley’s PEO, companies have access to eight different group medical plans, including five PPO plans and three high-deductible plans, supplemental plans like dental and vision, and other fringe benefits – all at costs typically only available to large companies.
Community Rating and the PEO Alternative
Under the Affordable Care Act (ACA), insurers must provide all small businesses (those with 1-100 employees) in the same geographic area with the same premium rates, regardless of the health history of any single business. Initial risk and premiums are calculated based on the history of the community as a whole, with adjustments allowed for age, family size, location, and tobacco use. The downside to community rating is that, even if a small company’s employees are extremely healthy, they may pay a higher premium if the overall health of all employees in their region is below-average.
As the co-employer for participant companies, Sheakley’s PEO provides an appealing alternative to community rating. Since clients are pooled together, individual companies are no longer considered “small businesses” and are therefore not subject to the ACA rules for community rating. The PEO can then analyze each client’s “worksite” risk and claims experience and quote a premium that is fair based on their employee population.
Although the carriers’ insurance premiums will likely increase each subsequent plan year, the PEO reevaluates each worksite employer’s use and risk level and assigns a new rate. If a client’s premiums do go up, it is typically a smaller increase than they would see if they were on their own.
The flexibility and predictability of the PEO’s benefits plan solution offers a superior option for small to medium-sized businesses.
Added Value of PEO Administration
For clients participating in its healthcare plans, the PEO offers a number of core benefit and administrative services, including:
- Health, dental, and vision
- Supplemental plans, like life insurance
- Retirement plan
- Flexible Spending Account (FSA)
- Health Savings Account (HSA)
- Health Reimbursement Arrangement (HRA)
- COBRA Administration
- Section 125 plan administration & testing
- Compliance management
- Annual open enrollment
- Plan roster maintenance
- Reconciliation of provider bills
- Electronic onboarding for new hires
- Automatic eligibility communication to employees
- ACA Reporting (1094C & 1095C) for employers with 50 or more employees
Most small to medium-sized companies cannot afford to have an entire team dedicated to benefit management and all of the tasks associated with it. Having access to the PEO’s team of administrative experts means that clients will be able to shift their focus to the development of other vital aspects of their business.
Shielding Clients with Compliance Management
As with other areas of business today, there are a multitude of rules and regulations governing employee benefits and remaining compliant can be difficult. A single missed deadline or unfiled form can cost an employer hundreds of thousands of dollars in fines and penalties.
Sheakley’s team of benefit professionals are also experts in managing all aspects plan compliance for their participating employers. From ERISA and COBRA to ACA and HIPAA, clients can rest-assured that all required deadlines are being met, all necessary forms are being filed, and all considerations are being taken to guarantee that they’re shielded from the legal pitfalls of noncompliance.
The Cost-Savings of Wellness
Wellness and healthy lifestyle programs are becoming more and more popular with both employers and employees alike. They not only provide the company a means by which they can decrease their insurance premiums, but they also provide the workforce with strategies and programs they can use to improve their overall health and fitness.
For employers, one of the biggest impacts to their insurance premiums are unhealthy employees. These employees typically have a higher frequency of sustained, costly claims from issues such as obesity, diabetes, and high blood pressure. By offering programs, seminars, and support groups that educate employees on everything from healthy eating to smoking cessation, companies are seeing significant improvements in the overall health of their employee populations and decreased insurance costs.
Sheakley, along with its insurance partner, United Healthcare, provides the tools and resources needed for clients to create and maintain comprehensive, modern wellness programs.
A Partner in Exceptional Quality & Service
The PEO exhaustively researched potential insurance partners and, in the end, decided to partner with United Healthcare (UHC), a nationally-recognized provider of exceptional group healthcare plans. Some of the key attributes that led Sheakley to this partnership are:
- UHC’s claims management record is superior to many other carriers, which reduces headaches for both clients and their employees. They don’t just pay bills, they truly manage their clients health with care.
- UHC evaluates all of the physicians within its network, using a five-star rating system, based on factors such as excellence of service, cost, and appointment availability. They strive to provide their participants with the best opportunities for positive outcomes.
- UHC reviews and manages cases strategically for employers. They proactively examine claims for appropriateness of care and incorrect billing. They understand that every dollar their clients spend is important.
- UHC is a nationwide carrier, with providers and plan options for any state and situation. Clients with employees working outside their home state don’t have to worry about carrying separate insurance for those workers. All of their needs can be met with one provider.
Realizing PEO Savings for Your Business
Modern businesses have more options for saving on costs and increasing the value of employee benefits than ever before. But, discarding an outmoded solution can be surprisingly difficult for some people. For employee health benefits, business owners must choose between the known quantity and a transition to the PEO alternative that better serves the financial and other business challenges of today’s employers.