The Trump administration unveiled an outline for potentially lowering the price of prescription drugs.

The blueprint identifies four key areas of focus:

  1. Improved competition
  2. Better negotiation
  3. Incentives for lower list prices
  4. Lowering out-of-pocket costs

Stay tuned for updates later in the year.

ACA Affordability Percentages Will Increase for 2019

The IRS recently issued a Revenue Procedure to index the contribution percentages used to determine the affordability of an employer’s plan under the Affordable Care Act (ACA).

These updated affordability percentages are effective for taxable years and plan years beginning Jan. 1, 2019. They represent a significant increase from the affordability contribution percentages for 2018.

As a result, some employers may have additional flexibility with respect to their employee contributions for 2019 to meet the adjusted percentage.

Affordable Coverage Test

For plan years beginning in 2019, employer-sponsored coverage will be considered affordable if the employee’s required contribution for self-only coverage does not exceed:

  • 86 percent of the employee’s household income for the year, for purposes of both the pay or play rules and premium tax credit eligibility
  • 3 percent of the employee’s household income for the year, for purposes of an individual mandate exemption (adjusted under separate guidance)

This adjustment means that employer-sponsored coverage for the 2019 plan year will be considered affordable under the employer shared responsibility rules if the employee’s required contribution for self-only coverage does not exceed 9.86 percent of the employee’s household income for the tax year.

The 2018 affordability percentage for the pay or play rules and premium tax credit eligibility was 9.56 percent. The 2018 percentage for the individual mandate exemption was 8.05 percent.

IRS Announces HSA Limits for 2019

The IRS recently announced that limits for HSA contributions will increase for 2019. The HDHP maximum out-of-pocket limits will also increase for 2019. The HSA contribution limits will increase effective Jan. 1, 2019, while the HDHP limits will increase effective for plan years beginning on or after Jan. 1, 2019.  

HSA Contribution Limit

  • Family – $7,000
  • Single – $3,500

HDHP Maximum Out-of-pocket Expense Limit (deductibles, copayments and other amounts, but not premiums)

  • Family – $13,500
  • Single – $6,750

Because the cost-sharing limits for HDHPs will change for 2019, employers that sponsor these plans may need to make plan design changes for plan years beginning in 2019.


? 2018 Zywave, Inc. All rights reserved


The General Data Protection Regulation (GDPR) is now in effect. This regulation affects U.S. businesses that have international ties.

The GDPR provides individuals with more control over their personal data.

Failing to comply with the GDPR can mean millions in fines. Speak with us to learn more about how this regulation may impact you.

IQ or EQ: What’s More Valuable to Your Company?

The smartest person is usually considered the best person for a job, especially when it comes to leadership. However, HR experts argue that traditional intelligence (book smarts) may not be as important as emotional intelligence (people smarts).

What is Emotional Intelligence?

Emotional intelligence (EQ, or emotional quotient) can be summed up by a few characteristics:

  • The ability to evaluate one’s own emotions and their greater impact
  • Solid understanding of one’s abilities and self-worth
  • An innate desire to help toward the greater good

In other words, having a high EQ means you work well with others because you understand how your and your co-workers’ emotions affect each other. The argument goes: if our behavior is dictated by our emotions, then understanding them is the key to long-term success.

Making Emotions Work for You

Leaders who understand emotions can channel that energy into producing desired results. For instance, managing employees is much easier when you can empathize and understand them on an emotional level. Nothing builds barriers faster than a perceived misunderstanding from a manager.


Overall, EQ is a fluid area of study, like most aspects of the brain. There are still many unknowns, so one cannot definitively say if emotional intelligence is the trump card for leaders. However, raising the EQ of managers even slightly can help with employee relations.

Consider offering EQ training to managers to help them relate better with their employees. You may be surprised how far a little emotional understanding can go.

Ignoring Diversity Training? You Should Reconsider

Starbucks made national news in May when it closed over 8,000 stores so its employees could undergo diversity training.

The training was in response to an incident where police were inappropriately called on two black men who were sitting peacefully in the store.

The incident sparked a national conversation about race and caused many companies to reassess their diversity training efforts, none wanting to be part of a future headline.

Make sure employees are properly trained so customers and members of the community can enjoy a pleasurable experience with your company.


? 2018 Zywave, Inc. All rights reserved

Tips for Managing Workplace Fatigue

Hectic schedules, stress and lack of sleep can all contribute to fatigue, which is a common and dangerous workplace hazard. Symptoms of fatigue include moodiness, drowsiness, loss of energy, and lack of motivation and concentration.

These are not ideal qualities to display at your job. Not only does fatigue make you less productive and personable, it can also cause a serious safety risk if you work with hazardous equipment or materials.

To help manage workplace fatigue, consider doing the following:

  • Eat a snack that includes complex carbohydrates and protein (like an energy bar or half a peanut butter sandwich on whole-wheat bread).
  • Avoid sugar, which will make you crash later.
  • Go for a short walk to re-energize yourself.
  • Drink a glass of water.
  • Manage your stress, and get more sleep.
  • Exercise regularly.
  • Limit your caffeine intake to one or two drinks per day.

Fatigue can also be linked to an underlying medical problem, psychological condition or sleep disorder. Talk to your doctor if you experience chronic or debilitating fatigue.

5 Ways to Eat Healthier at Work

Most full-time employees eat at least one meal at work. Not only are a significant number of meals eaten in the workplace, but work is also where employees are most susceptible to distracted or stress-related eating.

Good nutrition is an essential part of a healthy lifestyle, and eating healthier can increase your productivity, lower the number of sick days you take and reduce your risk of being in an on-the-job accident.

To start eating healthier at work today, consider doing the following:

  1. Avoid junk food. Clean your desk or work area of junk food. This includes snacks like candy, chips or crackers.
  2. Make time to eat full meals. While work can get busy, it’s critical that you make time to eat a healthy meal. Not only does eating a nutritious breakfast or lunch increase your energy, but it can also help you remain fuller for longer, thus reducing snacking.
  3. Bring leftovers into work. When cooking your dinner each night, consider setting aside portions for your lunch the next day. Not only does this make meal planning easier, but it can also save you money.
  4. Bring in bottles of water. Make an effort to drink water throughout the day. This can help energize you, supress your appetite and aid in weight loss.
  5. Snack smart. Snacks aren’t entirely off the table when you’re trying to eat healthy. Foods like dried fruit, jerky, nuts and applesauce are all good alternatives to unhealthy chips and candy bars.

While eating home-cooked meals is one of the easiest ways to eat healthier, certain jobs require employees to be on the road often. This, unfortunately, can lead to eating out more.

In this case, being careful about the kinds of food you order and the portion sizes can make all the difference in managing weight gain.

Safety Tips for Proper Lifting

Lifting is a common activity in the workplace, an activity that can be potentially dangerous if the proper techniques are not used. In fact, lower back injuries caused by improper lifting are some of the most common work-related injuries.

In order to protect yourself when lifting heavy items in the workplace, do the following:

  • Look over the load. Decide if you can handle it alone or if you need assistance. When in doubt, ask for help. Moving an object that is too heavy or bulky can cause severe injury.
  • Clear away any potential obstacles before carrying an object.
  • Use good foot positioning. Your feet should be shoulder-width apart.
  • Bend your knees. Bending over at the waist to reach for an object you want to lift puts strain on your back, shoulder and neck muscles.
  • Keep your arms and elbows as close to your body as you can while lifting.
  • Use your feet to change direction. Don’t twist your body.

Responding to a Workplace Accident

Accidents in the workplace can occur without warning, and it’s important to respond quickly to help those in need. In some cases, supervisors may not be around to provide the proper response guidance, and it’s up to employees to take action.

The following are some general tips to keep in mind if a co-worker is involved in a workplace accident:

  • Take control of the scene and try to restore order.
  • Call for emergency services if needed. Provide any immediate first aid, if you are qualified to do so.
  • Protect co-workers from potential secondary accidents. You can accomplish this by dismissing unnecessary personnel and denying access to the area.
  • Identify people at the scene. If they witnessed the incident, be sure to make a note of their names, as they can provide a report on what happened at a later date.
  • Notify upper management of the issue.
  • Do not put yourself in harm’s way.

Following an accident, follow up with your supervisor to ensure the appropriate paperwork is completed. Supervisors may require you to file an accident report or further detail what happened.

If you have any ideas of how the accident could have been avoided, share them with your supervisor or at a safety meeting. If your workplace does not have a first responder program in place, it may a good idea to suggest it to your employer.

Trained first-aid responders can provide immediate care to workers who become ill or injured on the job. The quick response and training of these individuals can make all the difference following an accident.



? 2018 Zywave, Inc. All rights reserved.

Sun Rays Aren’t the Only Thing You Can Catch at the Pool

As the temperature climbs, many Americans will flock to the pool to find some relief from the heat. While the cool waters can be refreshing, they could also be contaminated with bacteria that can make you sick. Read on to learn about the three most common illnesses you can catch from spending a day at the pool.

Cryptosporidium (Crypto for Short)

Crypto, a chlorine-resistant parasite, is one of the most common culprits for post-pool day illness and causes diarrhea, stomach pain and nausea. Unfortunately, symptoms can last for up to two weeks.

To avoid getting sick, don’t swallow pool water or touch your face until you’ve showered with soap and hot water.


Between the chemicals and other people’s bodily fluids in the pool, it shouldn’t be a surprise that you can catch pinkeye from swimming in a shared pool or hot tub.

To avoid getting this infection, wear well-fitted goggles every time you get into the water.

Hot Tub Rash

The warm water in hot tubs causes chlorine to break down quickly, making the chemical ineffective in killing the germ that causes an itchy skin infection that can lead to a bumpy, red rash.

To avoid getting this rash, shower immediately after going into the hot tub and be sure to wash your swimming suit before wearing it again.

Trouble Sleeping? Your Phone May Be to Blame

Yes, you read that headline right. According to a new study, using your phone before you go to bed can disrupt your sleep schedule and prevent you from getting a good night’s sleep.

Specifically, the study found that those who use smartphones or tablets before bed went to bed later and had a later sleep onset than those who didn’t. The study also found that those who used their phone or tablet before going to sleep had lower levels of the sleep-regulating hormone, melatonin. Lastly, the study found that electronic device usage before bed reduced the period of rapid eye movement (REM) sleep, a vital component in our sleep patterns.

So, if you’re having trouble sleeping, try putting your phone or tablet away before heading to bed.

Are You Up to Date On Your Immunizations?

Every August, the National Public Health Information Coalition sponsors National Immunization Awareness Month to promote the importance of immunizations at all life stages. Vaccination protects everyone, from infants to the elderly, from serious illnesses and complications of vaccine-preventable diseases.

Being properly vaccinated not only protects you, but everyone else around you, from falling ill with serious illnesses like measles, polio, hepatitis and meningococcal meningitis.

Follow the provided links to learn if you and your loved ones are up to date on the recommended vaccinations for each stage of life:

For more information on vaccines, or to learn more about what vaccines you may need, click here or talk with your doctor.


? 2018 Zywave, Inc. All rights reserved

PEO White Papers

 Professional Employer Organizations: Fueling Small Business Growth

  • (Bassi & McMurrer, 2013)

“The evidence on employment growth suggests that PEOs are making it possible for their clients to grow more quickly than their peers – both other small businesses as well as all companies throughout the economy. This can be attributed to a variety of PEO-related factors discussed in this study. Employees in PEO arrangements have access to a broader array of HR-related benefits and services. Yet PEO clients spend less on HR administration than similarly-sized peers, freeing up money that can be reinvested in the business…”

Professional Employer Organizations: Keeping Turnover Low and Survival High

  • (Bassi & McMurrer, 2014)

“In the 2013 report, ?Professional Employer Organizations: Fueling Small Business Growth,? a comprehensive analysis of existing economic data showed that small businesses in PEO arrangements have higher growth rates than other small businesses, and small business executives who use PEOs are better able to focus their attention on the core business. In further exploring the impact of PEOs and their potential to help small businesses better meet the challenges of today’s demanding economic conditions, this follow-up study examines employee turnover and business survival rates for businesses using PEOs and compares them to national data available from the U.S. Bureau of Labor Statistics (BLS)…”

An Economic Analysis: The PEO Industry Footprint

  • (Bassi & McMurrer, 2015)

“Our previous research on a variety of measures has found that this arrangement yields significant benefits to PEO clients, as they grow more quickly than comparable other businesses, doing so with lower rates of employee turnover and higher rates of year-to-year business survival. Anecdotally, evidence points to a growing PEO industry driven by a rebounding small business sector, an increase in the use of outsourcing by small businesses, and the rise of complicated employment regulations such as the Affordable Care Act (ACA)…”

The State of the PEO Industry 2016: Markets, Value, and Trends

  • (Bassi & McMurrer, 2016)

“This report on the state of the PEO industry in 2016 is the fourth in NAPEO’s series of white papers designed to help the general public and small business owners better understand the economic impact and value of the PEO industry. It explores three main topics: the market for PEO services, the value that PEOs create for their clients, and trends currently shaping the PEO industry. It uses a variety of sources, including external data (from governmental and  ongovernmental sources), econometric analysis, and interviews with industry experts by the authors. It also draws on key articles, laws/regulations, surveys, and reports…”



Interested in learning more about the PEO concept? – visit our PEO 101 Hub for additional insights.

On the other hand, if you have seen enough and want to get in touch with a member of the Simploy team, submit a contact request and a Simploy associate will reach out to you shortly.

Simploy representatives meet with hundreds of business owners a year and when interacting with business owners, one of the questions we get asked a lot is: “Is my business ready for a PEO”?

Now, our sales department would like us to respond to this question with an abrupt, “Yes! Of course it is!” but, in reality it’s not that simple. In fact, there are cases in which a PEO is just not the right fit.

Within this piece we will take a moment to outline the characteristics of a business that make it suitable for a PEO, and, we will discuss some of the business traits that prevent a PEO partnership from being successful. Ultimately, you know your business better than anyone and only you can determine whether a PEO is right for you. Our job is to breakdown all of the online chatter and make that decision simple for you.

 When is a PEO partnership a good fit?
We are routinely told just how beneficial our expertise has been to our clients, and we are proud of that. It was not until recently that we began to ask, why are some of our clients experiencing such incredible results and cultivating their PEO partnership, while our other clients (who are also growing) experience a lesser level of success. That inspired this piece and got us to think about the characteristics that make for a great PEO partnership.

When your business is growing
As your business grows it will be greeted by the additional tasks that expansion requires. Unfortunately, these are a massive drain on productivity (and profitability). It’s easy to understand that as your workload increases with fixed resources (manpower, time, etc.), you will become stretched and overextended.

If your business is currently experiencing growth in employees, or you expect to grow within the next few months, now is your time to get out ahead of the complications growth will bring. By partnering with a PEO, you can outsource the headache tasks and focus on what made you grow in the first place.


When your business is hiring
Like business growth, hiring (when not well managed) can be an incredibly time consuming struggle. If handled internally, hiring gives you two options: 1) spend valuable time to find the right candidate (which is very expensive), or 2) don’t spend enough time and run the risk of hiring the wrong candidate.

If your business will be hiring within the next twelve months, find a PEO, fast. The expertise possessed by PEOs will ensure you find quality candidates without having to spend huge amounts of time and money.


When your business is still fairly new
At Simploy we are lucky to be headquartered in a city experiencing an incredible entrepreneurial renaissance. Tech startups from across the world are opting to call our city home due to the startup infrastructure and culture here. This has blessed Simploy staff with additional opportunities to support passionate entrepreneurs as they form fledgling businesses.

They often ask us if it’s too soon for their new business to utilize a PEO, and, there is no easy answer to that question. If this is your concern, determining your suitability for a PEO will require some additional discussion. We invite you to reach out to the Simploy team for additional advice and guidance HERE.

Alternatively, head over to our article discussing PEO’s and Startups, HERE


When you make more than $15 per hour
As a business owner, you should rarely ever find yourself utilizing administrative software (QuickBooks, Sage, FreshBooks etc.) When you perform these menial tasks, you immediately turn yourself into a $15 an hour employee. Don’t. Your time as a business owner is far more valuable than that.

If the above statement fits your weekly routine and you find yourself completing clerical tasks, a PEO is in your interest. Outsourcing these tasks to an expert in that field will allow you to recover the time you would have wasted, whilst saving money.

 When is a PEO a bad fit?
When you have “1099 employees”.
We are sorry to be the bearer of bad news but, there is no such thing as a 1099 employee. A company’s workforce will either be made up of W2 Employees, or, 1099 Contractors. Unfortunately, the inaccurate classification of W2 employees as 1099 contractors makes it impossible to work with a PEO. A PEO relationship would see your employees become co-employees of your company and your PEO, but if your workers are classified as 1099 contractors, this is not possible.

 Note on 1099 Contractors
When an employee is incorrectly paid as a 1099 contractor, the employer is not expected to pay unemployment tax on that individual. This in turn results in lost government revenue. However, this exploitation is no secret and the government has proactively ordered auditors to hunt down this activity and stomp it out (through very steep punishments).


When you haven’t done your homework
Like any large decision, establishing a relationship with a PEO and trusting them requires a fair amount of due diligence. Do not use the first PEO you come across. At Simploy, we are confident in our model and conscious of what makes us great. If we are the first PEO that you have looked into, we are happy to let you take a look at the competition before partnering with us.


When your company is too big
Generally speaking, partnering with a PEO is no longer cost effective when your workforce exceeds 200 employees. At that stage, it could be in your interest to hire a dedicated HR associate.

If your company fits this description or is close to 200 employees, you should still get in touch with us. We will happily provide you with a side-by-side cost comparison as part of our quote. 

Determining whether a PEO is the right choice for your company is a decision that cannot be rushed. Almost every small- to medium-sized business will benefit from a PEO. Cases when this is not the case are extremely rare.

Nevertheless, take your time and read the articles within our PEO 101 Hub Page, we know how important it is that you come to a well educated decision.

Interested in learning more about the PEO concept? – visit our PEO 101 Hub for additional insights.

On the other hand, if you have seen enough and want to get in touch with a member of the Simploy team, submit a contact request and a Simploy associate will reach out to you shortly.

For some companies, outsourcing various administrative and human resources tasks may be more efficient than handling them in-house, or may even be necessary due to a lack of time, resources or expertise. Consider the advantages of an administrative service organization (ASO) if you want to outsource employment-related tasks.

  What is an ASO?

An ASO is an organization that provides administrative and human resources services for its clients; this is a simple way to outsource tasks that can be more efficiently handled outside the company.

ASOs can provide a variety of services for your company, including the following:
? Payroll?Direct deposit, W-2 processing, tax filing, reports, 401(k) administration and other tasks
? Human resources?Employee newsletters, help desk, handbooks, file maintenance, employee surveys, background checks, recruiting and other service options
? Employee benefits?Benefits enrollment, payment and premiums, COBRA administration and more

  ASOs Versus PEOs

ASOs differ from professional employer organizations (PEOs), which provide a more comprehensive package of services and include a co-employment arrangement. The co-employment arrangement in a PEO contract means that the PEO becomes the employer of record and the PEO assumes some or all of the risks and liabilities related to employment.

PEOs became popular in the 1970s and ’80s. ASOs emerged in the late 1990s as an alternative to PEOs that does not involve co-employment. The services offered by an ASO depend on the vendor, ranging from a few services such as payroll to many of the same services offered in a PEO model. ASOs typically offer more flexibility in what services are outsourced and allow the employer to retain all employment responsibility.

Aside from the issue of co-employment, another major difference between ASOs and PEOs is the fee amounts and how they are calculated. For PEOs, fees are typically a single amount for a comprehensive set of services that are bundled together, and fees are usually 2 to 6 percent of employees’ gross wages. With ASOs, fees are sometimes charged either per transaction or per employee, and you only pay for the services you want to use?no bundled services and accompanying fees.

ASOs can provide expertise and efficiency that can’t be obtained in-house, while still giving you more flexibility than a PEO. ASOs can cost as much as 50 percent less than PEOs both because you can pick and choose the services you want and because your company retains all employment risks and liabilities.

  Is an ASO right for your company?

Whether or not an ASO is right for your company depends on several factors. First, you need to consider whether you want or need to outsource administrative and HR tasks. If so, do you need a full-service contract or just a few tasks handled for you? If you’re looking for a complete package of services and are willing to enter a co-employment agreement, a PEO may be a better choice. ASOs might be the favored option if you want to keep more employment control and need to choose only a few services to outsource.

Interested in learning more about the PEO concept? – visit our PEO 101 Hub for additional insights.

On the other hand, if you have seen enough and want to get in touch with a member of the Simploy team, submit a contact request and a Simploy associate will reach out to you shortly.

Starting a company is not easy. It is a daunting process that requires an incredible investment of time, effort and capital. It is during this time that startup founders must leverage their relationships and sources of guidance to improve their chances of survival. A common surprise that startup founders fail to anticipate is just how much goes into HR. Whether it’s the increased levels of liability or the ever-growing number of employer regulations, accurately handling HR is a mammoth task that is almost always overlooked.

However, all is not lost. By visiting the Simploy learning center, you are on the right track. Within our learning center we have a plethora of articles aimed at guiding business owners so they feel comfortable making educated decisions.

Within this piece will we discuss several of the key benefits that a PEO will provide to a newly formed company. This will include the key benefits that PEOs provide to each and every client, as well as the unique benefits that a PEO can provide to a startup.

  PEO Benefits

Time & Opportunity Cost

Establishing a relationship with a PEO immediately frees up valuable time on your calendar. By outsourcing incredibly time-intensive activities to the experts, you can focus on performing the other tasks required of a business owner. The value of this should not be overlooked. If you pay yourself $60,000 p.a., every hour you spend performing a HR-related task, costs you almost $29!

When partnered with a PEO, you can expect the following to be entirely managed by the PEO:

  1. Workers’ Compensation, Safety & OSHA Management
  2. Government Compliance
  3. Recruiting, Hiring, Retention and Dismissal
  4. Training & Development
  5. Payroll (including PTO management, garnishments, withholdings, deductions, etc.)

As a startup founder, you know that time management is key to productivity and efficiency. With a small team of employees, you do not have the manpower to reap the benefits of specialization and instead are forced to each operate within varied roles. As mentioned earlier, a PEO will rid you of countless hours of non-revenue generating tasks, allowing your team to focus while you outsource the headaches.


Cost Savings/Economies of Scale

By partnering with a PEO and utilizing co-employment, a business owner can benefit from economies of scale that would have previously been unattainable. These economies of scale see cost savings in the areas of Workers’ Compensation & Benefits (401(k), Group Medical, Life, Discount Purchasing, Dental, Vision, etc.

For a startup, the economies of scale offered through co-employment are incredibly beneficial. Almost all companies begin as small entities which lack the purchasing power of established businesses. The economies of scale that a PEO will bring to you would otherwise be completely unattainable.


Hiring & Retention

As a PEO client, your ability to attract and retain talent will drastically increase due to three key reasons:

  • The quality of HR assistance provided to your employees improves. Simploy’s staff are true experts within their field and make a point to get to know your employees on a deep level. This results in your employees feeling valued which reduces their likelihood of leaving.
  • The aforementioned economies of scale allow you to offer competitive benefits packages. In the modern economy, benefits are highly important to those on the job market and offering a benefit package that exceeds your rival’s will attract quality talent to your company.
  • PEOs, like Simploy, pride themselves on their ability to accurately deliver payroll to their clients. Attempting to conduct payroll internally will increase opportunities for mistakes which can see your staff incredibly unhappy.

For startups, partnering with a PEO early in your business’s lifecycle will have long term benefits. By sourcing quality talent and harnessing their abilities during the early growth stages of your company, you can see rapid growth that would have otherwise been impossible. 


To summarize: the aforementioned benefits provide startups with an immediate competitive advantage versus their peers. A PEO, like Simploy, will ensure you are more productive than the competition, have better staff than the competition, and lower costs than the competition.

Those crucial competitive advantages have combined to create the following statistical fact: Companies that partner with a PEO are 50% less likely to go out of business. It’s as simple as that.

Interested in learning more about the PEO concept? – visit our PEO 101 Hub for additional insights.

On the other hand, if you have seen enough and want to get in touch with a member of the Simploy team, submit a contact request and a Simploy associate will reach out to you shortly.

In the modern world, there are more abbreviations than we know what do with! BBB, ACA, ERISA, FICA, FUTA, and all the rest, get incredibly confusing at times. Unfortunately, all those abbreviations can make it tough to discern the differences between two incredibly beneficial human resources outsourcing (HRO) strategies: PEO & ASO.

Within this article, we will provide a thorough definition of both PEO and ASO, describe the major differences, and finally discuss how you can determine which is right for your company.

What is a PEO?

A PEO is a professional employer organization. PEOs provide outsourcing solutions to their clients. These outsourcing solutions typically concern Human Resources Management, Payroll, Compliance, Workers’ Compensation, Safety & Benefits. PEOs provide reductions in liability as well as reductions in net labor costs and the time spent dealing with non-revenue generating HR. This culminates in the client achieving maximum productivity and increased profitability. The secret ingredient that allows for PEO arrangements to yield such fantastic results is Co-employment.


Co-employment is a legal construct that involves the sharing of employer responsibilities between a PEO and client. Through co-employment, workers are technically employed by two separate entities, you the business owner, and a PEO. Under a PEO arrangement, the client company remains the common law employer, but the PEO becomes the employer of tax record. Thus, with some exceptions, wages are reported under the PEO’s Federal Employer Identification Number (FEIN). The co-employees may be eligible for certain benefits offered by the PEO.

For more on co-employment and some of the common misconceptions related to co-employment, visit our article HERE

What is an ASO?

Administrative service organizations (ASOs) provide a similar service to that of a PEO, with a key difference. That being, under an ASO arrangement co-employment does not exist. The employees of the client company remain legally employed by the client company, not only as the employer of record, but also for tax purposes.

Outside of this, PEOs and ASOs typically offer many of the same services. An ASO may manage payroll, provide compliance guidance, govern workers’ compensation claims, etc. Ultimately, this will yield many of the same benefits (time savings, accurate payroll management, etc.)

ASO arrangements can be incredibly beneficial to business owners and the model is very attractive, especially to those businesses which already feature a dedicated HR professional(s). In these situations the ASO can operate in addition to incumbent HR staff and provide targeted assistance towards a  specific need.

Still unsure as to what an ASO is? Visit our article HERE for a more in-depth explanation

  PEO vs ASO: Major Difference

The absence of coemployment under the ASO model prevents the PEO from becoming the employer of record for your workforce. Co-employment allows for the amalgamation of businesses into large buying groups which, in turn, deliver economies-of-scale derived cost savings in the realms of Workers’ Compensation & Benefits. Without co-employment, the potential ROI from an ASO will almost always be less than that of a PEO.

For more on co-employment and some of the common misconceptions related to co-employment, visit our article HERE

  PEO vs ASO: Other Differences

Liability & Risk Apportion

Under an ASO framework, employer liability falls solely on the business owner/common-law employer.Alternatively, under the PEO model, some forms of liability are shared between both parties. This is a very attractive feature of the PEO model that results in a fiduciary relationship between the PEO and employer.

A la carte

The ASO model allows for the construction of customized service offerings on a case-by-case basis. Whilst this often results in a more convoluted billing process and reductions in clarity, the freedom to pick and choose which services your business harnesses exists. Alternatively, under a PEO model, for the sake of simplicity a single, all-inclusive, service package is offered. This can create a situation in which you pay for services that you do not utilize. However, an innovative business owner will recognize the value in these services.


  PEO vs ASO: Which is right for you?

Ultimately, this choice is a simple one. As a business owner, you must consider how much of the PEO model you intend to utilize and evaluate their value. Should you intend to harness the PEO’s expertise across most of the following: HR, Payroll, WC & Benefits, a PEO is probably the right choice for you. Alternatively, should you only see yourself wanting to capitalize on their expertise for select services, then, an ASO might be worth exploring.

With that said, you are in luck: Simploy possesses both a PEO and ASO offering. Reach out to us HERE and a member of our executive team will consult with you to determine your best fit.

Interested in learning more about the PEO concept? – visit our PEO 101 Hub for additional insights.

On the other hand, if you have seen enough and want to get in touch with a member of the Simploy team, submit a contact request and a Simploy associate will reach out to you shortly.

“How much do you charge”? is a question that we hear a lot at Simploy. We interact with thousands of prospects a year and they are always price conscious. This is no surprise. As humans whether we are buying a candy bar, a television or a home, price is incredibly important. Unfortunately, when it comes to “how much do you charge”?, there is no simple answer.

Every partnership between PEO and client is a unique arrangement that will have a unique cost. Therefore, this article cannot simply provide a list of prices like a restaurant menu. If only it were that simple! Instead, we will outline the different variables that make up a PEO’s cost structure and discuss how you can ensure your PEO relationship is as cost-effective as possible.

  What makes up a PEO’s price?

Every PEO quote is unique and the different factors that make up a PEO’s price structure can vary. However, there are several factors that every price calculation will include. Some of these components are purely pass-through charges which your business must pay, regardless of whether you use a PEO i.e. FICA, State Unemployment Tax (SUTA) and Federal Unemployment Tax (FUTA).

Within this portion of our guide we will address every factor that determines a PEOs pricing structure. After reading this, when you talk to a PEO, you will be better educated and able to make the best decision for your company.

Taxes: FICA (Social Security), FICA (Medicare), SUTA & FUTA

“Tis impossible to be sure of any thing but Death and Taxes” – Christopher Bullock (1716)

As Mr. Bullock expressed back in 1716, we cannot escape taxes. If your business aligns itself with a PEO, or attempts to operate without a PEO, the charges described in the table below must be paid regardless.

Nobody likes paying taxes, but, what’s wonderful about these four components of PEO pricing is: as the employer you already know what you are paying. Therefore as a business owner/employer, you can easily determine any tax-based savings that a PEO will provide.

SUTA Tax Savings

State Unemployment Tax (SUTA) varies from company to company. When a company is formed, it is assigned a SUTA rate depending on the state which it calls home. However, as time goes by, that rate can increase as employees leave the company and claim unemployment.

In some states, when a company partners with a PEO and harnesses co-employment, they are subject to the PEO’s SUTA rate rather than their own. This can result in tax savings.


Tax Rate (Percentage of Payroll)
 FICA Retirement 6.20%
 FICA Medicare 1.45%
 Federal Unemployment Tax  (FUTA) 0.60%
 State Unemployment Tax (SUTA) Varies by State
 Additional Local Taxes Applicable in certain geographic locations
 Total (Before SUTA & Local  Taxes) 8.25%


When a PEO charges a service fee calculated as a percentage of gross payroll, the above percentages will always apply.

  Workers’ Compensation Insurance & Risk Mitigation

The provision of quality risk management solutions and Workers’ Compensation insurance is a principle of every PEO and the cost of workers’ compensation insurance is directly correlated to the level of danger involved in that role. For instance, a clerical office employee will pay approximately $0.25, per $100 of wages whereas workers’ compensation insurance for a roofer will be considerably more expensive.

Co-employment allows PEOs to aggregate their clients into a large buying group before sourcing WC coverage. This creates levels of economies of scale that are incredibly cost effective. Clients are then charged WC premiums on a pay-as-you-go basis to ensure accurate premiums are paid. Ultimately the cost of WC through a PEO should always be less than any other provider might offer.

For more information on Workers’ Compensation, visit our Workers’ Compensation Master page HERE

  Administrative Fee & Other Charges

Outside of taxes, workers compensation and the PEO’s margin, there are a huge array of potential charges that will make up a PEO’s price structure. These charges range from employment practices liability insurance, employee assistance programs, life insurance coverage, pre-employment drug testing, on-site employee training classes, job candidate sourcing, etc.

Not unlike purchasing a car, these extras can quickly see your PEO costs rise. To ensure you are not faced with a nasty surprise when you get your first invoice be mindful of whether the PEO charges extra for these services. And, if they do charge for them, be sure to have the PEO disclose the itemized cost.

The best method to overcome the risk of small fees piling up is: use a PEO that charges an annualized, all inclusive, service fee. By aligning yourself with a PEO that charges an all-inclusive service fee, you can be safe in the knowledge that you will not receive an expensive surprise in the mail. Additionally, when operating this way liaise with your team of PEO partners to ensure that you take full advantage of their service offering and truly harness their expertise.


Breaking down PEO pricing, like building a home from scratch, is very complex. Just like a bespoke home can be comprised of a unique array of rooms; every PEO calculates their price in their own unique way. However do not get discouraged, there are several core components that every PEOs pricing structure will be made up of. 

They are:

 FICA (Retirement & Medical)  7.65%
 Federal Unemployment Tax  0.60%
 State Unemployment Tax  Varies by employer
 Workers’ Compensation Insurance  Varies by job role
 Additional Charges*
 PEO Administrative Fee  1.50-2.50%

*Assuming the PEO does not offer an all-inclusive structure.

Therefore, it is possible to get an approximate feel for how much a PEO relationship will cost your business.

To truly conduct cost benefit analysis and calculate whether a PEO will be a good fit for your business, it is important to consider the benefits that PEOs provide to their clients. Whilst these benefits can be hard to quantify we have outlined those benefits in an additional article.

Interested in learning more about the PEO concept? – visit our PEO 101 Hub for additional insights.

On the other hand, if you have seen enough and want to get in touch with a member of the Simploy team, submit a contact request and a Simploy associate will reach out to you shortly.