View this article online: https://www.insurancejournal.com/blogs/swbc/2022/10/24/690601.htm
This post is part of a series sponsored by SWBC.
Open enrollment season is just around the corner for your business clients. It’s a time many HR leaders dread because it puts a lot of extra work on their plates.
According to a report on a recent survey of small business owners, “A large majority (87%) said they manage employee benefits on their own, spending an average of 1.6 hours per week on benefits administration. During open enrollment, employers say they spend about 8 hours managing the enrollment process.”
The start of enrollment season also means many businesses are receiving their employee health plan renewals. The costs associated with providing health benefits rise each year, but the expected rise is sharp for 2023.
According to SHRM, “The average costs that U.S. employers pay for their employees’ healthcare will increase 6.5% to more than $13,800 per employee in 2023, up from $13,020 per employee in 2022.”
Open enrollment is a time for reevaluation for businesses. If your clients want to help mitigate health benefits costs while still offering robust benefits in a tight labor market, partnering with a Professional Employer Organization, or PEO, may be their best option.
According to NAPEO, co-employment “involves a contractual allocation and sharing of certain employer responsibilities between the PEO and the client, as delineated in a contract typically called a client service agreement (CSA).”
What exactly does this mean? Basically, when your clients have a co-employment arrangement with a PEO, both their organization and the PEO are responsible for certain agreed-upon obligations of employment. The roles will depend on the specific circumstances of the relationship. Some companies may primarily choose to work with a PEO to manage their payroll and workers’ compensation programs. Their relationship will look different than a company that primarily uses PEO services for health benefits and HR compliance and support.
Your business clients know how important it is to utilize their teams’ time and be as efficient as possible. Imagine how much time and money is lost due to a lack of “more hands on deck” to carry out some very important roles. Co-employment with a PEO can play a vital part in their company’s organizational infrastructure.
For example, many PEOs are able to provide scalable solutions that allow small businesses to access more affordable health benefits options than they would normally be able to utilize.
When it comes to offering quality health benefits that attract and retain top talent, the largest barriers for small- and mid-sized businesses are often health benefits cost and implementation.
PEOs provide a solution to both these challenges. As mentioned above, when your clients partner with a PEO, their business joins one large group plan, allowing them to take advantage of the economies of scale many larger organizations leverage to lower their overall benefits costs.
Let’s say your client owns a used car business that employs twenty people with one HR employee. If your client were to work with a PEO, they would gain access to an expansive network with greater discounts leading to more cost savings for their company.
PEOs handle HR tasks associated with open enrollment as well as individual employee claims and questions throughout the year. Even if your staff includes a dedicated HR specialist or team, partnering with a PEO can help them be more efficient and access support in all areas of human resources, including payroll processing and compliance.
When your clients partner with SWBC PEO, they gain the benefits of economies of scale, shared liability, and HR expertise. As a co-employer, we can help streamline their business operations and provide a safety net for benefits-related decisions.
Rather than make day-to-day decisions about how your clients run their company, SWBC PEO is here to help businesses increase efficiency, structure, and accountability on the backend of their organization. Visit our website to learn more.