Jeff, I am a commercial landscaper and I have 90 employees. I want to offer health insurance only to my four employees in the office. I cannot get health insurance from a carrier with only four employees taking the insurance. I was told to sign up with a PEO so I can do this. How is a PEO allowed to do that?
Well, many PEO’s have their health insurance with the same insurance carriers that you would look at on your own. The PEO needs to follow the underwriting guidelines that their carrier holds them to. No carrier would permit such a minimal participation of only four employees out of 90 taking the insurance. While there may be some PEO’s that are self-insured for health insurance and may permit this, I would be very cautious in dealing with a self-funded PEO, especially one that doesn’t use appropriate underwriting guidelines. Read these tips on reviewing a PEO contract.