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What is a PEO and how can a professional employer organization benefit your business?

what is peo insurance

For some business leaders, a professional employer organization (PEO) is an unfamiliar concept. However, a PEO is simply a relationship in which you select a provider to become your dedicated HR management and benefits administration partner, and deliver a broad range of HR services through a “co-employment ” model.

In a standard PEO, you retain the day-to-day control over how you manage your employees, and your provider handles the HR management and benefits administration, including:

  • Managing certain critical HR service responsibilities such as payroll, benefits and workers’ compensation
  • Shouldering many common employer risks
  • Access to high quality health care
  • Assistance with your HR business strategy as it relates to Health Care Reform
  • Providing IT infrastructure for HR management
  • Training your employees in both online and classroom venues

With Professional Employer Organization services you benefit from the “shared responsibility” model.

When you establish a co-employment relationship, you’re also sharing certain risks and responsibilities with the provider. Shared responsibility means you’re not facing the threat and impact of changes to laws and regulations and other compliance requirements alone.

For example, through TotalSource ®. our risk and compliance experts keep on top of the thousands of annual changes to HR regulations, including Health Care Reform, so you don’t have to. As a result,

we can help you avoid common benefits administration and HR management pitfalls and solve little problems before they turn into big ones.

Advantages of using ADP as your PEO provider

ADP TotalSource ® integrates all major HR management and employee benefits functions into a single-source solution, one that translates into real savings, increased efficiency and greater peace of mind. Key reasons to consider ADP TotalSource include:

  • Guidance from a trusted HR Business Partner who is dedicated to helping your organization proactively manage your employees, and assist during open enrollment to help you make the right business decisions
  • Shared responsibilities with a leading authority on employment risk
  • The ability to scale up or down with a minimal impact on your infrastructure
  • The opportunity to optimize your employee services and benefits like a Fortune 500 ® company.

For many small and mid-sized organizations, this relationship helps remove administrative burdens so the principals can focus on building the business.

* 69% of workers don’t feel fully engaged at work. Source: BlessingWhite 2011 Employee Engagement Report, Hewitt Associates .

* The others? Their employers average 12% higher profits over industry peers. Source: Employee Engagement, What's Your Engagement Ratio? Gallup Consulting, 2008.


Are you an ADP client or employee of an ADP client?

Category: Insurance

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