PPACA

Source: PEOCompare Blog

In Praise of PEOs

There is a lot of information bombarding the small business owner as the PPACA starts to ramp up. Questions range from the relatively simple to complex ones requiring the advice of accountants and tax lawyers. Coping with this imminent requirement may seem daunting but a Professional Employer Organization (PEO) may be the simplest and most affordable option available to owners and executive at small to mid-sized companies.

The PEO Advantage

Most obviously, there will be a steep and continual learning curve associated with the PPACA. This fact will only be exacerbated by any change of administration in November of this year. It is no exaggeration to state that public policy initiatives like the PPACA are outside the core competencies of most businesses while PEOs have dedicated considerable time and energy in understanding the new mandate. A happy marriage of their own business acumen with the regulatory expertise of the PEOs seems the most prudent course of action for the vast majority of companies.

PEOs offer an advantage on the business side as well. A single PEO administers the HR functions for multiple companies. This consolidation yields savings on administrative costs and provides greater leverage when negotiating with benefits providers. These savings are passed on to the clients of the PEO. 

A final concern of much small business owners is that by utilizing a PEO, they will be required to meet the requirements of large group plans. This is not the case as Congress specifically included language that safeguard small business tax credits, employer mandates and non-discrimination testing at the “client” level.

The Right Thing

Small business owners almost invariably want the best for their employees as long as the cost is reasonable. The problem remains as how to accomplish these two goals in the face of the new PPACA. Small and mid-sized businesses should certainly consider the options and advantages afforded by a PEO before embarking on any further healthcare or benefits decisions.

I recommend this piece that gets to the heart of the matter, Worth Noting – PPACA