|
Type of HRO Service |
Classic PEO |
Classic ASO |
|
Employer of Record Responsibilities |
Employer and employee taxes reported and deposited under
the PEO’s Federal Employer Identification Number (FEIN). |
Employer and employee taxes reported and deposited under
the Client’s FEIN. |
|
Workers' Compensation Insurance |
Coverage provided under PEO’s master policy, with each
client maintaining their individual modification rate. |
Coverage provided by client's own policy. A policy must be provided for each client
individually and the client maintains their own
modification rate. ASO is named as broker of record (BOR). |
|
Safety and Risk Management |
Claims management provided by PEO. Safety programs
compliance administered by PEO. |
Claims management provided by ASO. Safety guidance provided by ASO. |
|
Health, Dental & Vision Plans |
Coverage offered under PEO's master policy, client may
choose to use own policy. |
Coverage provided by client's policy only.ASO is named as BOR. |
|
Supplemental Benefits & Retirement Plans |
Supplemental benefits offered under PEO's master policy.
401(k) provided by PEO Multiple Employer Plan (MEP) or
as a Standalone Plan in client's name. |
Supplemental benefits offered by client's policy in
client's name. 401(k) sponsored by client may choose
Standalone or MEP. ASO is named as BOR. |
|
Section 125 Flexible Spending Accounts |
The PEO is the Plan Sponsor and is responsible for
administration and testing. |
The Client is the Plan Sponsor and the ASO is
responsible for administration and testing. |
|
Human Resources |
Majority of
human resource (HR) services are included in PEO
pricing. |
Multitude of services offered in either “a la carte” or
bundled pricing. |
|
Regulatory Compliance |
Required to be provided by PEO |
Client’s responsibility with assistance provided by
ASO's best practices. |
|
Added Value to Client |
The PEO model is a shared risk arrangement through the
establishment of an Administrative-Employment
relationship between PEO, the client, and the client’s
employees. Under this model, PEO assumes a large portion
of the financial, occupational, and operational risks
associated with the employees on behalf of the client.
This model reduces the cost of maintaining and
delivering services to the clients, which reduces each
client’s operating costs. |
By aggregating multiple clients together and servicing
from one location, economies of scale and service are
achieved, thereby reducing the cost of maintaining and delivering
human resource and personnel management services to
clients, which in turn reduces each client's operating
costs. |
|
Why Does My HRO Want to Designate the Broker of Record? |
Your HRO will want to designate a BOR in order to
provide the HRO with access to billing, enrollments,
claims assistance, disputes and other plan
administrative tasks. Additionally, only your HRO, through an
aggregation of expertise and purchasing power, is
uniquely qualified to negotiate and deal with the
complexity of multiple plan designs and burden of
administering today's ever changing benefit offerings |
