A professional employer organization (PEO) is an outsourcing firm which provides services to small and medium sized businesses (SMBs). Typically, the PEO offering may include human resource consulting, safety and risk mitigation services, payroll processing, employer payroll tax filing, workers' compensation insurance, health benefits, employers' practice and liability insurance (EPLI), retirement vehicles (401(k)), regulatory compliance assistance, workforce management technology, and training and development. The PEO enters into a contractual co-employment agreement with its clientele. Through co-employment, the PEO becomes the employer of record for tax purposes through filing payroll taxes under its own tax identification numbers. As of 2017, industry gross revenues were estimated to be over $174bn annually. In 2017, there were 907 PEOs operating in the United States, servicing 3.7mm worksite employees (WSEs), which were spread over approximately 175,000 PEO clients.
In co-employment, the PEO becomes the employer of record for tax purposes, filing paperwork under its own tax identification numbers. The client company continues to direct the employees' day-to-day activities. PEOs charge a service fee for taking over the human resources and payroll functions of the client company: typically, this is from 3 to 15% of total gross payroll. This fee is in addition to the normal employee overhead costs, such as the employer's share of FICA, Medicare, and unemployment insurance withholding.
One service provided by a PEO is to secure workers' compensation insurance coverage at a lower cost than client companies can obtain on an individual basis. Essentially, a PEO obtains workers' compensation coverage for its clients by negotiating insurance coverage that covers not just the PEO, but also the client companies. This is allowed because, legally, the PEO is the employer of the workers at the client companies.
PEOs can also offer basic levels of background & drug screening.
Using a PEO could potentially save the time and staff that would be used to prepare payroll and administer benefits plans, and may reduce legal liabilities or obligations to employees that it would otherwise have. The client company may also be able to offer a better overall package of benefits, and thus attract more skilled employees. The PEO model is therefore attractive to small and mid-sized businesses and associations, and PEO marketing is typically directed toward this segment.
An administrative services organization (ASO) is an organization that provides outsourced solutions to meet the administrative and HR needs of the client, with the client retaining all employment-related risks and liabilities. The term ASO was established by the PEO industry in the late 1990s in order to distinguish between selective administrative support and full-scale PEO services. The principal difference between the two types of service is that, in an ASO arrangement, the employer remains the employer of record for tax purposes. Ultimately, with this structure, tax and insurance filings are done through the administrative firm, but under the client company’s employer identification number. All W-2 and workers' compensation policies remain the responsibility of the employer and not the administrative firm. Some of the more common administrative services offered are payroll processing, payroll administration, benefits administration, and corporate benefits. The benefits of an ASO are not easily quantifiable. Administrative firms performing ASO duties conceptually save business owners time and money through economies of scale. Some businesses, especially small businesses or start-up companies, are not prepared for the administrative duties involved with running a business. The knowledge and capabilities of small and mid-sized businesses are usually limited to occupational expertise, not legal or administrative expertise.
One of the most significant advantages of using an ASO is the benefits from cost saving techniques and bargaining abilities that the ASO can provide due to their large number of workforce employees.
ASOs are built for larger companies that need the actual functions of payroll, workers' compensation, health and wellness benefits and HR support and Services done for them. Typically companies over 100 employees find value in an ASO model. Although the ASO and PEO business models are somewhat similar, an ASO does not include co-employment.
We live in unprecedented times. The new “employer culture” seeks to reduce cost, reduce risk and engage in new strategies that fit the future of providing benefits to their labor force. Our model identifies the demographics of your company, develops new compliant benefit options and implements and administers them. ABI can maximize efficiency and performance in employee and employer insurances as well as provide employee tools for communication of benefits changes, eligibility and timely customer service. A company’s most valuable asset is its people. By providing superior benefits you are better able to recruit and retain good employees. Hiring the right employee increases productivity and reduces costs associated with such things as absenteeism, drug abuse and poor performance.
Group Medical Plan Options – Choose from a list of compliant major medical plans. If any of the plans we offer are not satisfactory to you liking, we will customize a plan for you. Sit down with our underwriters and reinsurers, tell them what you want, lets make it happen.
TeleMedicine – One of the fastest growing industries in the world. If you do not have medical insurance, if you have a high deductible plan, save money and time by talking to the doctor to get your prescription over the phone instead of time off and travel. For a small monthly fee you can have unlimited access to certified practitioners in any state.If you do have major medical insurance, you can add a 24/7 feature to your major medical insurance policy to get prescriptions by phone. Don’t waste time going to the doctor to get a prescription, when you can accomplish the same outcome over the phone.
Manage time consuming transactional functions. ABI’s customized cloud-based HR software, reduces and controls your operating cost, while improving your company’s bottom line. ABI gives you a wide array of innovative solutions, to improve the speed, efficiency and accuracy of your company’s payroll functions.
ABI works with multiple carriers across the country. State Funds to Self Funded Plans to Captive Carriers.
Our Loss Control consulting service focuses on working with our clients to help promote a safety culture that save lives, prevent injuries & illness, and reduces all associated costs.
Our expertise in workplace safety is very broad and ranges from the general office / service environment to construction, healthcare / personal care, food service, manufacturing and transportation. Specific Loss Control initiatives may include, but are not limited to:
We will deliver on Best Practices Claims Management within our Workers’ Compensation program as part of our cost containment strategy. Aggressively managing claims is paramount to our success.
Our Workers’ Compensation team is focused on ensuring injured employees receive appropriate treatment by qualified medical professionals in the most cost effective manner.
Processes may vary by state and include the following:
Having an effective RTW strategy is imperative to help meet the goals and objectives for managing the bottom line. Our team works with clients to identify potential RTW candidates and provides program / process guidelines and tracking mechanisms that help capture and illustrate return on investment.
Further, value added proposition for RTW is as follows:
A DFWP can enhance an employer’s ability to protect the health and safety of their employees and customers, as well as Company reputation and profits. In addition, a DFWP can help to retain stable workers and attract desirable applicants thereby creating a more productive workplace.
We have developed specific proven processes that meet or exceed regulatory / statutory requirements and can be adjusted to meet the needs of our clients. Those processes include:
Another benefit to having a DFWP is the ability to require drug / alcohol testing of an injured worker. This may allow for the opportunity to reduce related costs if determined to be a contributing factor and/or proximate cause of the injury based on state specific factors.
Guiding our clients on a compliant path is an ongoing service. Compliance applies to all of the above services. Our goal is to make each client aware of the pitfalls that trip up employers. Customer Service is what keeps us in business. Currently ABI operates in 17 states. Our commitment to customer service has retained clients since we opened our doors in 1991.