Leaving Your PEO? 5 things to expect from a skilled health broker

by Mike Gazzano

Maybe you’re considering a migration away from your PEO, but you’re hesitant because you see the transition process as long, grueling and convoluted.

The truth is a smooth, well-organized transition away from your PEO can be wrapped up in as few as 90 days under the right conditions. That’s especially true when you’re working with a skilled, experienced broker who can guide you through the ins and outs, ensuring all legal contingencies are covered and all employee benefit needs are being replaced with better alternatives. But the key words are "skilled" and "experienced."

"Not all health insurance brokers can execute a migration like this,” notes a recent article from HR compliance consultant BLR. “Unless they can prove to you they understand how to navigate the process and have done it before, I would be careful before kicking off such a process. And that’s compounded if you don’t have a healthcare broker that can do really high-level analysis, and instead relies solely on paperwork and contract negotiation.”

In general, here’s the process you can expect when you ask an objective and capable broker to evaluate whether you should keep your PEO, move to a different PEO or divest of PEOs entirely.

  1. Your consultant will talk to you about your current plan and your view of its pros and cons. He/She will thoroughly evaluate your current and future needs, delve into your pain points and learn more about the unique challenges being faced by your organization.

  2. He/She will then take an unbiased look at a wide range of potential benefit solutions to determine which could meet your needs better than what you’re already using. They will consider factors including cost, value, flexibility and the track records of the vendors involved, evaluating and comparing data to ensure their findings are backed up by facts.

  3. After that comprehensive overview, your consultant will present their recommendations to your organization, thoroughly explaining the rationale for their conclusions and detailing exactly how a migration would take place. Note that in some cases, they may conclude leaving your current PEO is not in your best interest. That's where the integrity of this partner plays a key role.

  4. If you accept their recommendations and hire them as your consultant for the transition, they may absorb the cost of their report into their future services. If not, you will likely pay a flat fee for this report before you go your separate ways.

  5. If your broker provides guidance to make a change you should expect that they create a road-map on how to execute such a transition. They'll cover all details involved in ensuring seamless transitions for everything from workers’ compensation to payroll, risk and safety management, recruiting and training. Perhaps most importantly, he or she will l eliminate gaps in health insurance that could lead to penalties for you and/or a loss of earned deductibles for your staffers. They will also optimize the timing of your transition so you don’t risk forfeiting already-paid payroll taxes.

Your migration away from a PEO need not feel overwhelming if you put the task in the hands of the right partner. Don’t let fear of the process keep you from finding the best possible benefits for your employees, now and into the future.

Mike Gazzano partners with Lockton Companies, the world’s largest privately held insurance and risk management consulting firm, to find optimal solutions for organizations that have outgrown their PEOs. Call him at 303.621.5020 or email him at Michael.Gazzano@PEOBenchmark.com for a free consultation.

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