Is the Health Insurance Marketplace the Right Place for Your Employees This Year?

October 31, 2019

Open enrollment for individuals to enroll in the federal or state Health Insurance Marketplace for 2020 is coming soon on November 1, 2019. For many small business owners, seeing this reminder in their email or on a TV commercial is not just a reminder to go online and enroll; rather, it’s a reminder that they need to reevaluate once again the decision to offer an employer sponsored plan or continue to kick the can.

Most owners know the benefits of offering an employer sponsored plan – from enhancing their recruiting position to the positive culture impact of providing a convenient, tax advantaged option for employees along with reinforcing the feeling that their employees work for a secure, professional organization.  There are so many benefits to offering an employer sponsored health insurance plan, so what’s the problem? Even in the wake of the Affordable Care Act, for many small businesses health insurance feels anything other than affordable.

What’s a small business to do?  Just continue as is and let employees make it work? Pretty much like every other hurdle a small business owner faces, at some point the only thing to do is think creatively for a solution that minimizes the cost and amount of time spent while maximizing the benefit. Enter the Professional Employer Organization or PEO.

PEOs provide small to medium sized businesses the opportunity to operate administratively like a big business, offering comprehensive, well-priced benefit options.  A PEO handles the back office, administrative HR functions for small businesses including processing payroll, managing some employer insurances like Workers Compensation, and offering some employee insurances like health, dental, vision, life, and disability.  The PEO takes on the administrative burden of setting up and managing the compliance pieces of payroll and insurance options along with transferring some of the risk of liability for noncompliance.  Since they do this for many small businesses, they are also able to take advantage of the economies of scale and offer these benefits many times at a cost savings as compared to what is available on the open market.

If this is starting to sound too good to be true, don’t fret because this is an authentic exception to the rule. The economies of scale realized by PEOs are quite real.  The National Association of Professional Employer Organizations states that administrative costs are around $450 lower per employee for businesses that use a PEO, and health insurance is a part of this savings.

To learn more about if a PEO option might work well for your business reach out to us at PairPEO.  In a 30 minute introductory call we can examine your company’s business needs and objectives to evaluate which PEO might be your perfect pair.

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