| 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 PEOs 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 Stand Alone 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 |
