More than just payroll.
It's your personal HR department.
Most business owners think PEO’s (professional employer organization) are just about payroll processing, but a PEO is much more. PEO’s are the critical tax advantaged component to offering competitive group health benefits to Cooperative members, providing our members their own personal HR department in the process.
Cost: $45 per employee/month
A PEO Provides:
- Your own HR Department.
- Assumed risk and liability such as income tax liability, compliance liability, and employee suit liability.
- Professional assistance with compliance (payroll, OSHA, EEOC, etc.).
- Manages claims for workman’s comp.
- Reduces litigation, resolving issues before they reach court.
- Employee handbooks and policies.
- Manages Federal and State Tax.
- Group benefits, pretax savings accounts (HSA’s/Flex/Section 125), and retirement savings like 401(k).
- Files employer Federal/State tax filings, including W2’s sent to employees.
What to Know:
Don’t let the name scare you. It’s just an IRS classification created during the 1960’s and 1970’s that small business’ can leverage in their favor. Co-employment is the contractual sharing of employer responsibilities between a PEO and its client. In a co-employment agreement, workers are technically employed by two separate entities:
The Business Owner (Employer of Site and Management) – As the business owner, you call the shots, manage the business as you always have, hire employees, keep full equity in your business, and compensate the owner dentists as you always have. Not much really changes from how you operate now, except that now you don’t have to deal with the HR functions of your business and can focus more on growing your practice and treating your patients.
The PEO (Employer of Record) – A PEO handles personnel-related functions. Employers of Record do not supply a workforce; they supply services and benefits to a client employer and its existing workforce. The dentist maintains control of all business decisions and operations while the PEO manages employee-related operations.
In essence, an employee at your practice is technically employed by two entities. Using an Employer of Record, a dentist can transfer a substantial portion of the risk and responsibilities associated with employees to the co-employer. Your employees are included in much larger groups managed by a PEO so they can offer better benefits and mitigate risk within that group.
In order to participate in a Group Health Insurance Plan, the participants must be employed by the same group. This is where the PEO comes in. PEO’s can become the “Employer of Record” for tax purposes but the dentist remains the “Employer of Site and Management” for everything else. Once the PEO is utilized, the participants can participate in any group benefits, usually at significant cost advantages. Without a PEO, patients seeking insurance are usually left to purchasing Individual Plans or to use a Health Exchange.
- Your Own HR Department – Experienced professionals in HR, benefits, payroll, risk management, and providing HR guidance, materials, and service. Taking care of HR in your business so you can focus on growth.
- Assumed Risk and Liability – Assumes certain employment related liabilities including: income tax liability, compliance liability, and employee suit liability.
- Compliance – Deliver professional assistance with compliance (payroll, OSHA, EEOC), while also communicating government requirements and changes to small businesses and their employees.
- Claims – Manages claims for workman’s comp., etc. Reduces litigation, resolving issues before they reach court.
- Employee Handbooks and Policies – Supplies clear, easy-to-read and professionally written employee handbooks, policies, procedures and practices.
- Payroll –Processes payroll for all employees and deposit those right into their accounts, on-time every month.
- Federal and State Tax – Manages and absorbs liability to pay. If IRS/State didn’t get paid, they go to the PEO.
- Benefits – Group benefits, pretax savings accounts like HSA’s/Flex (Section 125) accounts, and retirement savings like 401(k). Most business owners are excluded from participating in a Flex(cafeteria) plan, a PEO can solve this problem.
- Tax Filings – Files employer Federal/State tax filings, including W2’s sent to employees at the end of the year.
- HR Assistance – A PEO provides professional assistance with employment-related issues.
- Payroll – Delivers on-time and accurate payroll to include all tax payments etc.
- Employee Handbooks and Policies – Employee handbooks, policies, procedures and practices for your business.
- Benefits – Access to comprehensive benefits often previously unavailable such as 401(k), Section 125 plan, comprehensive insurance benefits, Flexible Spending Plan.
- Online Access – Improved access to payroll information, benefits, personnel data, vacation and sick time accrual.
- Protection – Enables more employees to receive statutory protection.