PEO vs. Brokers: Which is Best for Employee Benefits?

How does insurance work with a PEO?

A PEO is an HR outsourcing provider that engages in a co-employment agreement with small and mid-sized businesses and manages administrative tasks on their behalf.

As a co-employer to hundreds or thousands of employees, PEOs are able to leverage their collective buying power to negotiate better rates for high-quality health insurance and other employee benefits. By partnering with a PEO, like G&A Partners, you can access Fortune 500-level benefits at affordable prices.

When deciding between a PEO and an insurance or benefits broker, consider the comprehensive HR services and expertise that a PEO also provides, such as:

• Managing your payroll
• Providing compliance support
• Offering recruiting services
• Providing workplace safety expertise
• And more
  

Your PEO will also handle benefits administration, such as managing open enrollment, handling invoice reconciliations, enrolling new hires, handling terminations, providing COBRA assistance, and helping to ensure your benefits are meeting federal and state laws. Learn more about how G&A Partners can help you solve health insurance challenges.

How does insurance work with a broker?

An insurance or benefits broker – also referred to as a consultant or advisor – shops for insurance and employee benefits on behalf of your business. The broker will meet with you to understand your company’s needs, research and compare plans, then provide recommendations that are the best fit for your business and your budget.

An insurance broker will either receive a commission from the insurance company you choose or will charge you a flat fee. Keep in mind that an insurance broker differs from an insurance agent, who generally works for a specific insurance company and only offers that company’s products.

When deciding whether to engage a PEO vs. a broker, consider that both parties will help when it comes time to renew your benefits. A PEO will also manage benefits administration on your behalf. Some brokers will help with open enrollment and administration, so it’s important to ask about the full scope of services when evaluating a broker.

Some brokers may specialize in one type of insurance, such as health insurance, or may be able to shop for other employee benefits. A PEO’s offering will vary based on its size and whether it’s a regional or national organization. At G&A, a leading national PEO, we’re able to provide our clients access to a wide range of ancillary benefits with top carriers in addition to high-quality and affordable medical plans.

What is the difference between an insurance broker and a PEO?

When deciding whether to choose a PEO vs. a broker, here are some differences to consider.

How to choose between an insurance broker or a PEO for your employee benefits.

If you’re unsure which direction is best – a PEO or a broker for employee benefits – consider the current needs of your company.

A PEO offers comprehensive HR solutions, including employee benefits (health insurance and ancillary options such as retirement and wellness plans), payroll services, compliance guidance, employee onboarding, training, and more. When small and mid-sized businesses engage with a PEO, they are able to focus on their clients and growth, leaving the HR work in the hands of a trusted partner.

A broker for employee benefits may be more appropriate if your company has the internal resources and knowledge to manage HR responsibilities but needs expertise when shopping for insurance plans for employees.

Can a broker work with a PEO?

As a business owner, you may have developed a relationship with your insurance broker that you wish to maintain. At the same time, you may be interested in a full-service HR outsourcing solution, like one a PEO can provide.

In this case, your broker can work with a PEO. However, finding the right PEO is key.

Broker-friendly PEOs – like G&A Partners – will work with your broker to find the best solutions for your business. For example:

• Happy with your current medical coverage or other benefits? G&A will carve out those services but still provide benefits administration, saving you and your broker valuable time.
• Ready to explore other benefits options? When you work with G&A, your broker will gain access to our deeper selection of master medical options.

Some PEOs have given professional employer organizations a bad reputation amongst brokers because they operate in a predatory manner. In other words, they may attempt to poach clients from their brokers.

But at G&A, we enter into a contractual agreement with brokers, which protects their business from predatory PEOs and brokers.

Our goal is to work with your broker to help your business grow and succeed. It’s a win-win solution. (If your current broker is interested in learning more, they can check out this link.)

So, how do you know if it’s time to engage a PEO along with your current broker? Consider these questions:

• Are you spending a significant amount of time reacting to HR items?
• Is your onboarding process automated or manual? (G&A would automate this process.)
• Have you been fined for compliance violations or are you concerned you may be noncompliant?
• How recently have you updated your handbook with the latest employment legislation?
• Do you need more time to focus on your business, family, or health?
• Are you tracking time with a manual process?

At G&A Partners, our benefits and HR experts work with small and mid-sized businesses and insurance brokers to build a competitive benefits package that will help you attract and retain the best talent for your team.