A PEO changes who your employees work for on paper.
A professional employer organization can solve real problems for a growing employer: payroll, HR administration, and sometimes access to benefits a small group could not buy alone. It can also lock you into a bundle that is expensive to leave and opaque to compare. We evaluate it the way we evaluate any other funding decision — on your actual numbers, with the exit terms read.
Co-employment is a benefits decision usually evaluated as a payroll decision.
The payroll and HR case for a PEO is easy to see on an invoice. The benefits consequences sit underneath it and are rarely part of the comparison.
Who Sponsors the Plan
In most arrangements the PEO becomes the sponsor of the health plan your employees are in. You are no longer choosing the plan, the carrier or the network — you are choosing a provider who chooses them. It also moves compliance paperwork such as plan documents to the PEO, which is convenient while you stay and a gap to fill when you leave. Ask who the named plan sponsor is before signing.
What You Can See
Bundled pricing often means you cannot separate the benefits cost from the administration cost, and claims experience may not be visible to you at all. That matters on the way in, and it matters much more on the way out, when a new carrier asks for experience you do not have.
What the Employee Sees
Plan design, network and contribution structure are set at the PEO level. If your workforce is concentrated somewhere the PEO’s plan is weak, that is not something you can adjust. The practical test is a network check: run your employees’ home ZIP codes and the doctors they already use against the PEO’s plan before you join, not after the first complaint.
Like for like, including the costs nobody quotes.
A PEO proposal and a direct program are rarely quoted on the same basis. We normalize them before either is judged.
All-In Cost per Employee
Administrative fee, benefits cost, workers’ compensation handling and anything billed separately, expressed per employee per month against the direct alternative — the same way we compare funding models. Benefits and administration are often billed as one bundled figure, so we ask for the pieces separately. Where the PEO will not split them, that refusal is itself worth weighing.
What Your Team Stops Doing
There is genuine value in work that comes off your desk. It belongs in the comparison as a number, not as a feeling, and it is the strongest part of most PEO cases. We price it as the hours your HR and payroll staff actually spend today, so the saving is measured against real work rather than a vendor’s estimate of it.
The Exit
Notice periods, mid-year timing, and what happens to deductibles already met when employees move to a new plan. A move made at the wrong point in the year resets everyone’s accumulators. Employees who have met their deductible late in the year feel a reset most, so an exit is often better timed to the plan year than to the contract anniversary when the two differ.
A second opinion does not require leaving.
A Review of What You Have
What the bundled plan actually covers, how the contribution structure compares to the open market, and whether the administrative fee is reasonable for the service being delivered. We also check what the fee buys: which HR, payroll and compliance tasks the PEO actually performs for you, and which your own staff still handle despite paying for them.
Negotiating Where You Are
Sometimes the right outcome is a better arrangement with the incumbent. Knowing what the open market would charge is what makes that conversation possible. We price a direct group plan on your census, so the incumbent is responding to an actual alternative rather than a vague threat to leave. A PEO that knows you have a quote in hand has a reason to revisit its fee or its plan options.
Transition Planning
Moving into or out of a PEO has timing, reporting and continuation implications. It is a project with a critical path, and we help coordinate it as one. The critical path starts from the new plan’s effective date and works back: census, carrier applications, payroll deductions, anyone already on continuation coverage, and telling employees about new ID cards and networks. We also place the replacement group coverage.
What employers ask about a PEO.
What does a PEO actually change?
Who employs your people on paper. That co-employment relationship is what delivers the administrative relief, and it is also what makes the arrangement harder to leave than it was to join. In many arrangements the PEO issues the W-2s and sponsors the benefits plan, while you still direct the day-to-day work.
Is a PEO cheaper?
It depends what you compare. The honest comparison is all-in cost per employee against your current total — plan, administration, payroll and staff time — not the bundled rate against your medical premium alone. Staff time is the piece most comparisons leave out, and it can favor the PEO for a small company with no HR staff. As you grow, the balance can shift toward a plan of your own.
What should we ask before signing?
What you will be able to see, and what happens when you leave. A PEO that will not show you claims or rate detail has made your plan unmeasurable, and an exit without a transition plan lands mid-year. Also ask for the fee schedule in writing, including how the fee changes as your headcount or payroll grows.
PEO Advisory in Bloomfield Hills for Owners Weighing Their Options
Many small business owners joined a PEO to get health coverage and payroll help in one place. Years later, they wonder if they still need it, or how to leave without a gap in coverage. PEO advisory in Bloomfield Hills helps you answer both questions with clear facts.
We are CFH Insurance Consultants, an independent benefits firm in business since 2007. We are not a PEO, and no carrier owns us. We help employers in Bloomfield Hills, Troy, Royal Oak, Pontiac and across Michigan.
PEO Advisory
A PEO is a professional employer organization. It uses a setup called co-employment. That means the PEO becomes a co-employer of your staff for payroll, benefits and some HR tasks. Your employees join the PEO’s group health plan.
Our PEO advisory in Bloomfield Hills covers three things:
- Whether to use one. We compare a PEO’s benefits and fees with a group plan of your own.
- Leaving one. We explain the exit terms in your PEO contract and what to line up before you go.
- Replacement coverage. We place a new group health plan for your employees.
Because we are not a PEO, we have no reason to push you in either direction. We lay out the costs and trade-offs so you can decide.
Should my small business use a PEO?
It depends on what you need. A PEO can bundle payroll, benefits and HR support. That can help a very small company with no HR staff.
But you give up some control. You use the PEO’s plans, and its fees can be hard to see. As you grow, a group plan of your own may cost less and give you more choice. In Michigan, small group means 50 or fewer employees, with rates set by carrier filings, ages and ZIP codes. Compare that price with your PEO’s full cost.
How do I leave a PEO without a gap in health coverage?
Timing is everything. Your new group plan should start the day after the PEO plan ends. Here are the basic steps:
- Read your PEO contract for notice rules and end dates.
- Pick an exit date that lines up with a new plan start date.
- Set up your new plan and payroll deductions before the switch.
- Tell employees early about new ID cards and any network changes.
We walk you through these steps and flag what to watch for.
Common questions
Is CFH a PEO?
No. We are an independent benefits firm. We advise on PEOs and place group coverage. We can review a PEO proposal, help you negotiate with the one you are in, and help coordinate a transition in either direction, including placing replacement group coverage if you leave.
Will my employees lose coverage if we leave?
Not if the new plan starts the day after the PEO plan ends. That is why the dates matter. Missing that date by even a day creates a gap, so we set the exit date against the new plan’s start date first and work backward to the PEO’s notice deadline.
Can you compare our PEO plan with other options?
Yes. Send us your PEO benefits summary and costs, and we will compare them. Include your most recent PEO invoice, since fees often sit there rather than in the benefits summary, and a census if you have one. We price a direct group plan on the same employees so the two are compared like for like.
Talk to us about PEO advisory in Bloomfield Hills
Book a 30-minute call and bring your PEO invoice and benefits summary. Our office is at 41000 Woodward Avenue, Suite 350 East, Bloomfield Hills, MI 48304. Call 248.370.8853.
Send us your renewal.
We’ll tell you whether it looks competitive, where we see opportunity, and the five questions we’d put to your carrier. No cost, and no obligation to move anything.
The renewal letter
Your current plan summary
Contribution split by tier
Enrolled counts by tier
Four documents — two more if your group is 50 or more. Nothing else; every extra one is a reason to postpone.
An independent employee benefits consulting firm. We look at the entire benefits program — cost, plan performance, risk and administration.
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