NAPEO: National Association of Professional Employer Organizations

August 2015
To be a PEO, you have to do certain things for your clients—human resources, employee benefits, payroll and taxes, and workers’ compensation—through the co-employment relationship.
    That doesn’t sound very colorful. How much variety can you create with just these four elements? As it turns out, quite a lot. Remember spin art, the children’s arts and crafts toy with the turntable? You place a piece of paper on it, turn it on, and drip paint on it as it spins. You only have a few colors, yet each piece of spin art is different.
    It’s like that. Once a company has established itself as a PEO by having these core elements, there are endless possibilities, which are manifested in the PEO’s business model. Are you a pure-play PEO, multi-line (do you also offer staffing or other services), or do you include an ASO option? Do you sell on value, price, or benefits? Do you use internal sales staff, brokers, or channel partners? Is your technology platform on premises, in the cloud, or SaaS? Is your service delivery high-tech, high-touch, or basic? These options are not mutually exclusive, either, and the size and age of the PEO figure in as well.
    Adding even more variety are the different levels of human resources services and benefits you can provide. It all starts with the transactional—making everything work through HRIS and payroll processing—and then proceeds to HR policies and practices, employer compliance, recruiting and hiring, training and development, performance management, benefit plan administration, PEO-sponsored insurance and benefits offerings, safety and risk management, and on and on.
    This feature starts with an overview of the PEO business model, and then presents the business models of 10 different PEOs. As you will see, there are myriad offerings and ways they can be delivered.
    And that’s the beauty of the PEO business model...

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legal currents
Receipt of Commissions and Other Fees by PEOs and Affiliates from the Sale of Health Insurance Products
Barry L. Salkin, Esq.
A frequently asked question about health insurance products is whether a PEO or an affiliate of a PEO can receive commissions or other fee payments from the sale of health insurance products. Analysis of the issue requires a consideration of both the Employee Retirement Income Security Act of 1974 (ERISA) and state insurance law. This article will discuss...
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Keys to Client Loyalty and Satisfaction
Geoffrey M. Vandal
Benefits have long been a means by which employers have demonstrated their commitment to their employees. Yet, over the past several years, employees have taken on more responsibility for their benefits as employers adjust their strategies to address rising costs, the implications of an uncertain economy, and the institution of healthcare reform. Through their benefits offerings, employers generally...
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risk management
Small PEO Best Practices
Linda Mielke
I am frequently asked such questions as, “How do I get to the next step,” or “How can I compete?” As a smaller PEO, you may feel more vulnerable to a variety of influences, including economic swings, marketplace availability, legislative changes, and, of course, the competitive landscape. How do you compete with the “big boys” and still retain your profits? In the risk management context, there are ways to...
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The Evolving PEO Sales Process
Dave Rettig
With the feature of this issue of PEO Insider® examining the PEO business model, it might be interesting to look at the evolution of the PEO sales process. I last chronicled this evolution in a PEO Insider article in December 2003. I will briefly revisit this so we can assess where we are and where we’re headed...
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start-up guide
Workers’ Compensation for the Start-Up PEO
Robert G. Barrow, Jr., CIC, CWCA, CBWA
Is this title an oxymoron? Good grief—any cheerful pessimist would bet even odds that snapping up dirt-cheap workers’ compensation is an impossible endeavor. Actually, it’s not impossible and there are several ways for a start-up PEO to establish a workers’ compensation program...
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the inside word
Professional Employer Model Continues to Evolve to Meet Business Needs
Brent R. Tilson
2015 NAPEO Chairperson

By now, many PEOs are using the statistical research in their marketing that proves companies that use PEOs outperform those that don’t.1 Yet, it has been said that while we all spell PEO the same way, that is where the similarities end. Thus, we have this interesting dynamic: at the macro level, businesses greatly benefit from PEO services, yet, at the micro level, PEOs provide their services in many different ways...
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napeo notebook
Engagement: A Tale of Three Members
Patrick J. Cleary
In this space, I have often written about the importance of engagement—the importance of our members (i.e., you) connecting with local elected officials to carry the PEO message. In the last month, we’ve had three good examples of members around the country who have stepped up and engaged with their local officials, each in his or her own way...
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up front
NAPEO Participates in SHRM Conference
Kerry Carruthers
As most of you know, NAPEO has undertaken for the past two years a concerted effort to raise the visibility of the PEO industry. Up until now, our efforts have primarily focused on small business owners and executives in the form of our “Find a PEO” website, extensive online advertising, white papers highlighting the small business benefits of using a PEO, and more...
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statehouse update
NAPEO Members, and a Client, Brief Massachusetts Officials about State PEO Bill
Melissa Kelly
Bob Burbidge, CEO of Genesis HR Solutions, hosted a legislative briefing and tour for members of the Massachusetts Joint Committee on Labor and Workforce Development at Genesis headquarters in Burlington, Massachusetts, on June 1, 2015. Members from ADP TotalSource helped facilitate the event, which was held under the banner of the New England Leadership Council...
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napeo advisor
Large Deductible Study, ‘Smart’ I-9 Form, No-Hire Clauses, Earned Sick Time Changes
Farrah L. Fielder, Esq.
Q. Rumor has it that the National Association of Insurance Commissioners (NAIC) and the International Association of Industrial Accident Boards and Commissions (IAIABC) have joined forces on a project to update a 2006 Workers’ Compensation Large Deductible Study. Is this true, and, if so, do PEOs and NAPEO fit into the project?
    A. The NAIC and the IAIABC have created a joint working group for a ...

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peo community
Not Just a Living, But a Life
Lee Yarborough
Each year, the Propel HR executive team comes together to evaluate our successes over the preceding year and set goals for the future. We do this through the lens of our core values: growth, excellence, integrity, and stewardship. Success is not determined solely by our bottom line or even by the quality of our work, but also by how we contribute to our community...
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peo spotlight
Employer Flexible: Chris Dollins
Learning PEO from the Outside In

Stephanie Oetjen
A few years before starting his PEO, Chris Dollins managed about 150 sales reps on four teams across southeast Texas for Sprint. He then left that position and opened his own retail location for the company, his first entrepreneurial venture. Three years later, with partners Michael Hopkins and Mike Greathouse, he entered the PEO world by founding Employer Flexible in Houston, Texas, in 2005. Wait a second—jumping from selling phones to PEO?...
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global insights
Businesses Hire 500,000 Veterans and Military Spouses
Thomas J. Donohue
As Americans celebrated the July 4th holiday last month, the U.S. Chamber of Commerce celebrated a major milestone for Hiring Our Heroes, an initiative that helps veterans, businesses, and our economy...
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NAPEO Medallion Partners
NAPEO Thanks its 2015 Medallion Partners
Black Diamond Partners

Diamond Partners

Artex Risk Solutions, Inc.         Compass Consulting Group, Inc.

Massachusetts Mutual Life Insurance         McHenry Consulting

Risk Transfer Insurance Agency, LLC
Platinum Partners

MetLife        Summit Software         ThinkWare Corporation

Transamerica Retirement Solutions
Gold Partners

AEU Holdings, LLC         EAP Consultants, LLC

PayPlus Software, Inc.         Pinnacle Financial Services, Inc.

Stonehenge Insurance Solutions
Silver Partners

Barrow Group, LLC         Eflexgroup, Inc.

Fisher & Phillips LLP         Kronos SaaShr, Inc.
Bronze Partners

Capital Alliance Corporation         Holland & Hart         Jackson Lewis P.C.

NetWise Technology         U.S. Risk, Inc.

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