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Gobbling Up Technology

Supporting Growth • Integrating Data • Improving the Client Experience

Do you remember those early video games that were so addictively fun, yet so frustrating when you failed a level or ran out of lives? Somehow, the fun always won out and you kept playing. PEO technology is like that, too. It can do so much for the PEO and its clients, yet getting to the next level or figuring out how to make it all work can be frustrating at times. Still, the excitement of finding new ways to support your PEO always wins out. With both vintage video games and PEO technology, the fun comes in developing a strategy to beat the game.

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The Employer Mandate’s Impact on Plan Documents and SPDs

Through PEO Insider® and other NAPEO resources, you are probably familiar with the requirements of the “employer mandate” imposed by Internal Revenue Code (Code) Section 4980H, which was added by the Affordable Care Act (ACA). Section 4980H provides that an “applicable large employer” (generally, an employer that employed an average of at least 50 full-time employees on business days during the preceding calendar year, including full-time equivalents, or FTEs) will be liable for an assessable payment if certain healthcare coverage requirements are not satisfied, and one of its full-time employees is certified as eligible to receive an applicable premium tax credit or cost-sharing reduction to help pay for individual health insurance coverage.


Managing Benefits Vendors

There are many things for a PEO to consider when managing benefit plans, whether it’s the PEO’s plan or a client-sponsored plan. With offices in Florida, North Carolina, South Carolina, and an affiliation in Europe, Landrum Human Resources Companies administers or manages about 11,000 employees, with more than 8,000 of those employees enrolled in one or more benefits plans, including retirement, medical, dental, vision, and various supplemental disability plans. An instrumental and integral part of managing employee benefit plans is choosing vendors wisely. We all know that vendors can make our lives easier or drive us to the brink of insanity! That’s why choosing each vendor is so important. Customer service, in this era of cost-cutting, is as critical as the fees/premiums a vendor charges. You will find that if a client owner can’t access his health benefits and get a claim resolved, at that moment, it will not matter how much you saved him in premiums—he will not be happy with you.

Risk Management

Workers’ Compensation, PEOs, and Capacity

‘The ones who are crazy enough to think they can change the world are the ones who do.’ Steve Jobs Workers’ compensation carriers and professional employer organizations have typically shared a love/hate relationship through the years. The accumulations of premium volume along with the inherent efficiencies have been a difficult temptation for many insurance carriers. Specifically, PEOs were a darling of the insurance industry during the 1990s. Those were the days of new frontiers and the wide-open west. Unfortunately, some things are just too good to last. Hardening workers’ compensation markets, redeployment of capital, lack of reinsurance, and moderate to poor underwriting results led to the exodus of many carriers who only moments before had graced our presence. Some carriers realized they did not yet know how to manage this new industry called PEO, choosing instead to vacate.


A Question of Bandwidth

Bandwidth refers to the amount of data that can be sent in a certain amount of time. An Internet connection with higher bandwidth can move data more quickly than an Internet connection with lower bandwidth because it has greater capacity available. Because they manage HR and payroll data, PEOs should be aware of what this means for their businesses.

Start-up Guide

How to Add a Master Health Plan to your PEO’s Menu of Services

Including health benefits as part of the service package has always been a strong selling point for PEOs. That’s because healthcare, though important to employees, has always been relatively complicated and expensive for small businesses to provide. Accessing this key benefit through a PEO gives employers a simple turnkey solution.


The Inside Word

Section 3511 Brent R. Tilson, 2015 NAPEO Chairman

As I reflect on this past year, we have had many successes. Clearly, the most significant is the passage of the Small Business Efficiency Act (SBEA). Much has already been written and discussed about this significant achievement for our industry and it is truly a foundational moment for our future. Yet, I believe we have another opportunity—one of clarity.

NAPEO Notebook

One Terrific Show Patrick J. Cleary

By the time many—if not most—of you read this, you will be enjoying the beautiful environs of the Arizona Biltmore in Phoenix, Arizona, at NAPEO’s 2015 Annual Conference & Marketplace, from September 10 through 12. If you are there, you are in for one terrific show.


SBEA Implementation Delayed Until July 1, 2016 Thom Stohler

On August 8, 2015, the Internal Revenue Service announced on its website that the PEO certification program created by the Small Business Efficiency Act (SBEA) will be fully implemented on July 1, 2016—a year later than required by the law.

Special Report

NAPEO Releases Third White Paper Outlining Economic Impact of PEO Industry Kerry Carruthers

Two years ago, NAPEO unveiled its first white paper, “Professional Employer Organizations: Fueling Small Business Growth.” It was a comprehensive analysis of existing economic data by noted economists Laurie Bassi and Dan McMurrer showing that small businesses in PEO arrangements have higher growth rates than other small businesses and small business executives who use a PEO are better able to focus their attention on the core business. It also highlighted the fact that PEOs are able to offer a broad array of HR services at a lower cost and offer access to retirement plans to small business that may not otherwise sponsor them. NAPEO’s second white paper, “Professional Employer Organizations: Keeping Turnover Low and Survival High,” further explored the potential of PEOs to help small businesses better meet the challenges of today’s demanding economic conditions. It showed that PEO clients have lower employee turnover and a much higher business survival rate than companies that do not use PEOs. NAPEO and its members have used these comprehensive and credible reports to help small business owners better understand the PEO value proposition and the ways working with PEOs can help their businesses grow and thrive.

NAPEO Advisor

NAIC/IAIABC WC Study, Small Insurer Failures, White-Collar Exemptions Farrah L. Fielder, Esq.

Q. What is the status of the NAIC/IAIABC large/mega deductible workers’ compensation study white paper? A. The National Association of Insurance Commissioners (NAIC)/International Association of Industrial Accident Boards and Commissions (IAIABC) large/mega deductible joint working group and interested study participants met by phone multiple times per week throughout June, July, and into August. Drafts of the following modules have been distributed among...

Up Front

The NAPEO PAC Thom Stohler

During the last election cycle (2013-2014), candidates spent almost $4 billion. The average congressional race cost $1.7 million, and the average Senate race cost more than $10 million. In large states, such as North Carolina, a competitive election cost $70 million. Individuals who want to be elected (and re-elected) to office must raise large sums of money to pay for these campaigns.

PEO Index

Sustained Growth Suggests Growing Traction of PEO John Slavic

Despite the negative gross domestic product (GDP) of the first quarter of 2015 and the tepid growth that has followed, the PEO Employment Index reveals sustained growth.

PEOs in the Community

Philanthropy is Imperative to Business, and When Communities Prosper, Everyone Benefits Beckie Porter

Members of the HR Strategies staff know that there is an understood communal agreement between community and business, and that philanthropy leads to community building. We are proud to support both local and national charities, knowing that it is our corporate responsibility to give back to the community where we work and live. We proudly sponsor and engage with the Quinn House, St. Jude Children’s Research Hospital, and the American Cancer Society’s Relay for Life. With so many of our co-workers having been touched by cancer either personally or within their families and friends, along with having a family-oriented workplace culture, supporting these organizations is both personal and heartfelt to all of our associates.

Small Business Perspective

4 Ways to Fix Small Business Tax Troubles

Nobody enjoys paying taxes, but for small business owners the burden of taxes is increasingly weighing heavier and heavier. And Congress is taking note. Two congressional committees, the Senate Small Business and Entrepreneurship Committee and the House Small Business Committee, held hearings recently to brainstorm how to combat tax compliance issues for small business. NFIB’s Tax Counsel Nick Karellas testified about the need for tax reform, plus small businesses and tax practitioners spoke at the hearings about problems they face and proposed solutions for the complex tax code businesses operate under today. Business Journals reporter Kent Hoover sat in on the hearings and summarized four primary steps that Congress could take to make tax compliance easier for small business.

PEO Spotlight

Staff One, Inc.: Mark Sinatra Stephanie Oetjen

When Dell Wood retired from Staff One, Inc. and the PEO industry in 2008, he turned over his PEO to Mark Sinatra, who was acquiring it through Gordian Capital, his acquisition holding company. Mark observed at the time that Dell got down to business very quickly, was a straight-shooter and a smart guy, and had built a great company. “I had done a fair amount of research on the PEO industry and spoke to several people,” said Mark, chief executive officer of Staff One, based in Dallas, Texas. “One of the PEO consultants I spoke with randomly called me one day to discuss the Staff One opportunity. I met with Dell Wood and was able to iron out a transaction, and the rest is history.” Having joined the PEO world, Mark had his chance to bring his expertise and experience in private equity, mergers and acquisitions, and business consulting to bear with Staff One. How he got to Staff One, however, is an interesting story.

Global Insights

Overtime Rule Would Hurt More Than Help Thomas J. Donohue

President Ronald Reagan once said that the nine most terrifying words in the English language are, “I’m from the government, and I’m here to help.” Indeed, what the government may see as a helping hand often winds up being a ham-handed effort to impose its will on America’s job creators, resulting in more harm than good. Such is the case with the Department of Labor’s proposed overtime rule, which the administration claims will extend eligibility for overtime pay to some 5 million workers.


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