How to get Health Insurance when you are the only employee?

Small businesses are the life of our economy. The people who chart out every year to start their venture face many challenges, health insurance is one of those, and it has been for a long time. Maybe you are a sole proprietor right now looking for health insurance, what do you do?

Your Options

You have three viable options. Let’s explore each one.

  1. ObamaCare plans are available to everyone. They might not be the best thing ever, but they provide what you need, and better than no insurance.
  2. Join a Union or Freelancers Group. These plans are limited and require joining an organization.

  3. A Professional Employer Organization (PEO) gives you access to large group health insurance, along with payroll, workers’ comp insurance, and HR.  

It’s pretty clear that a Professional Employer Organization (PEO) is your best bet, but it isn’t right for everyone. Let’s take a look at what a PEO is and how it works.

PEO - What is it? How does it work?

A PEO provides comprehensive HR solutions for small and mid-size businesses. Including Payroll, Health Insurance, Workers’ Compensation insurance, HR, tax administration, and regulatory compliance assistance across the country.

Co-employment is allocation and sharing of employer responsibilities between a PEO and its client. In a co-employment agreement, workers are technically employed by two separate entities: the business owner, or client employer, who controls their daily duties and core job functions; and the PEO, or co-employer, who handles personnel-related functions.

In plain English, when a company joins a PEO, the company’s employees are employed by the PEO and the company. The company still manages the employees, employs them, pays them, hires and fires. The PEO handles the payroll, tax administration, health insurance, and so on. Thereby sharing or “co-employing.”

What to expect?

Joining a PEO makes a lot of sense to some sole proprietors and businesses with under ten employees. Knowing what to expect can help you decide if a PEO will make sense for you.

You will get access to national health insurance plans from the world’s largest carriers. The PEO will do your payroll, take over your workers’ comp insurance, and access to expert HR guidance.

In exchange for those services, you will pay an Administration Fee per month per employee. The Administration Fee covers the majority of the PEO’s services. All of your cost - including taxes, health insurance premium, workers’ comp, and so on will be deducted from your payroll.

You will set your salary if you are a K-1 or a sole prop, while still being able to pay yourself as you had been before joining the PEO.

So. How do You Know if a PEO is right for you?

Fair question. And here are some questions to ask to know if PEO is right for you.

  1. Is health insurance a significant concern? If it is then a PEO will make sense for you.
  2. Are you married to your payroll provider? If you are it won’t work because you have to change your payroll provider.
  3. If you have employees, are you concerned with attracting top talent, and retaining the best employees? If the answer to that question was yes, then PEO will make sense for you.

How to find the Perfect PEO

You have a few options here also.

  1. Contact each PEO and get quotes. There are currently 1100 PEOs in the US, so that should only take a few years.
  2. Use the services of a PEO broker and let them find the perfect PEO for your needs.

Still got questions? Let us give you the answers. Call us at (888) 973-6276 or email us.