By Why does your census decide which PEO benefits are better?
Your census is the employee and dependent information each PEO uses to price your benefits. Five things in it change the answer:
- Where your employees are located
- How many participate
- How many dependents enroll
- The plan designs you choose
- Your employer contribution strategy
That is why a logo or a website can't settle it. Paychex says its PEO clients join a larger benefits group, and Insperity lists competitive employee benefits as part of HR360. Neither page tells you which will be better for your census. Only the proposals can.
What should you put side by side?
| Item | Question to answer |
|---|---|
| Networks | Will your people's doctors be in them? |
| Deductibles | How do they compare plan by plan? |
| Out-of-pocket maximums | How do they compare plan by plan? |
| Carriers | Which carriers does each proposal use? |
| Prescription coverage | What is covered? |
| Employer contribution | How much does the company pay? |
| Employee paycheck deduction | What comes out of each paycheck? This is the number your people will actually feel. |
Then ask each provider how rates are set and what the renewal process looks like.
What is the difference between premiums and allocations?
With Insperity you won't necessarily see premiums. You may see the word "allocations" instead, and that can throw a comparison off. A proposal might look like a better deal on benefits when it is really showing the share of dollars being allocated to benefits on your account. Paychex, by contrast, generally has to show premiums because of how its carrier partnership is set up.
Until both are expressed the same way, you're not comparing like for like.
What decides the better fit?
One provider may fit better because of contribution flexibility, plan design, network access, or how the arrangement fits your longer-term strategy. To find out, rebuild both proposals on the same basis and normalize the numbers: same employees, same assumptions, same wages.
Adapted from Steve's video Paychex vs Insperity: How to Review the Two Models, chapter 6:17-8:29.
Common questions
Are PEO benefits better than buying our own plan?
It depends on your census: locations, participation, dependents, plan design and contributions. Compare the proposals, not the marketing.
What does "allocation" mean in an Insperity proposal?
It can reflect the share of dollars allocated to benefits on your account rather than a plan premium, which can make a proposal look cheaper than it is. Ask for premiums.
What should we compare in PEO benefits?
Networks, deductibles, out-of-pocket maximums, carriers, prescription coverage, employer contribution, and each employee's paycheck deduction.
Can I compare two PEO benefits totals?
Not on their own. A single total hides plan design, networks and how costs are presented.
Steve Taylor, founder of Thinq HR & Insurance Services, has 15 years in employee benefits, HR, payroll, PEOs and insurance, including time inside Paychex, ADP and TriNet.