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  • Susan Wiener

Understanding the Benefits of Using a PEO for Health Insurance


As a business owner, providing employees with quality health insurance while controlling costs can feel like a high-wire balancing act. A Professional Employer Organization (PEO) could be the solution to achieve both. PEOs offer small and mid-sized businesses numerous advantages, from potential cost savings on healthcare to streamlining HR tasks.

What is a PEO?

A PEO is a company that partners with businesses to handle various administrative and HR functions. This includes payroll processing, benefits administration, compliance support, and more. With a PEO, there's a co-employment arrangement where your employees become joint employees of your company and the PEO.

How PEOs Impact Health Insurance Costs

  • Larger Risk Pool: PEOs serve multiple businesses, creating a larger employee pool. This can give them greater negotiating power when securing health insurance plans, leading to lower premiums for everyone involved.

  • Access to Better Plans: Smaller businesses may have limited access to the plans they can access. PEOs can provide better benefits packages, including more comprehensive coverage options.

  • Administrative Savings: PEOs often handle the administrative part of health insurance enrollment, billing, and claims management. This saves in-house time and lowers HR-related costs.

What Can a PEO's Health Insurance Cover?

Like traditional employer-based plans, PEO healthcare coverage can vary, but typical coverage includes:

  • Medical: Doctor visits, hospitalizations, surgeries, prescription drugs.

  • Dental: Routine cleanings, fillings, and major dental procedures.

  • Vision: Eye exams, glasses, and contacts.

  • Supplemental Benefits: Life insurance, disability, critical illness coverage, etc.

Is My Business Eligible for a PEO?

Partnering with a Professional Employer Organization (PEO) can be advantageous for many small and medium-sized businesses. Depending on the PEO, there might be specific size requirements, but the concept is designed to help companies that would otherwise struggle with specific HR tasks due to limited resources.

Beyond Health Insurance: Other PEO Services

PEOs provide a wide range of services to streamline business operations, including:

  • Payroll and Tax Administration: Handling payroll processing, tax filing, and compliance with employment laws

  • Benefits Administration: Offering and managing retirement plans, flexible spending accounts (FSAs), and other employee benefits.

  • HR Support: Providing guidance on policies, recruiting, performance management, and employee training.

  • Risk Management: Supporting workplace safety, workers' compensation claims, and regulatory compliance.

Is a PEO Right for Your Business?

Partnering with a PEO depends on your specific needs and goals. Consider the potential benefits alongside the costs involved. Factors to evaluate include:

  • Company Size: PEOs are typically most valuable for small to medium-sized businesses.

  • Need for HR Support: PEOs can be a huge relief if HR takes up significant time and resources.

  • Cost of Benefits: PEOs can offer a way to control costs while potentially acquiring better benefits packages.

Explore the Potential of PEOs

A PEO could be a strategic solution if you're looking to reduce healthcare costs, increase employee benefits, and streamline HR processes. Susan Wiener Enterprises has strong relationships with reputable PEOs and can help you evaluate whether this model is right for your business. Reach out today—call us at 631-385-9602 or submit a contact form on our website,, to learn more.

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