THREE PEO MODELS MOST COMMONLY IN USE
The Traditional Full Service PEO
The Traditional Full Service PEO with Co-Employment Relationship is a powerful tool for businesses to free in-house resources, and consolidate Human Resources, Benefits, Retirement and Payroll. It allows companies to focus on their core business and income generating strategies, and also capitalize on cost savings offered by these consolidations. PEOs assumes the role of the Administrative Employer, including HR, Payroll, ACA Compliance, and Benefits, while the Client company continues to be the Work Site Employer, retaining direct control of the employees, and their job duties. The PEO offers top notch health insurance and retirement options to the employees. Client companies benefit by the savings on Workers Compensation Insurance, with no deposits and end of term audits. PEOs operate with a low Experience Modifier, which allows many client companies to work in industries where a low Modifier is a contractual requirement. In most cases, after being in a PEO for two years, the client company is eligible to claim the PEO’s Work Comp Modifier as its own.
Carve Out Option
PEO Agreements with a Carve Out Option allows the Client company to retain their own Health or Workers’ Compensation Insurance. Businesses in a captive Work Comp program, or having a low modifer, or in a dividend program, may elect to keep their own insurance. The client company can maintain existing beneficial arrangements, and customize their plan.
PEO with an ASO
PEO with an ASO (Administrative Services Only) Option allows clients to access PEO benefits of Payroll Processing, access to low cost Benefits, HR Consulting, yet still operate under their own Tax ID and Experience Modifier. The PEO is not the employer on record, nor is there a co-employer agreement between the companies. The PEO can provide HR Consultancy services and assist in claims management and employment legal liability issues.