The Step-by-Step Strategy on How We Saved a PEO Client $32,400

Business Administrative Consultants (BAC) successfully found a prospect who asked us to come in and take a look at their current PEO situation. We asked two straight forward questions to help us complete an initial analysis on where they were at:

  • Who are you with today?
  • How long have you been with them?

Since they had been with their PEO for over five years, the client was comfortable with both the service and salesperson. We find that this type of comfort level often leads to a lower level of vigilance in identifying options that are more affordable.  The "friendship" between the service person and the client makes it uncomfortable for the client to shop for perhaps both better services that may be priced more affordable. 

We conducted a thorough analysis, received the requested information, and found a better solution for this client.  Additionally, the ASO we found was more transparently priced so the client could make sure they aren't over-billed. As a result, we discovered that this client was paying rates above market on medical benefits at the cost of about $90 a month per employee, essentially saving the client about $32,000 annually.

The Steps Needed to Save Clients Money on the Costs of Their PEO

1. Answered a list of questions as part of a needs analysis.

2. Gathered billing information for their medical insurance, a census, plan designs.

3. Complied all of that information and used it to get quotes from various carriers.

4. Found comparable plan designs with similar deductibles and copay, so that we could compare apples to apples.

5. Created a spreadsheet so that the client could see the savings attached to comparable plans with his existing one. In some cases, some of the plans were actually better than the one he was currently using.

6. Showed the client that the overall savings was going to be $32,000, based upon the number of employees times the premium amount.

7. Found him an Administrative Services Organization (ASO) model that worked well for him.

8. Once a plan was chosen, we talked about the transition period that was needed.

9. We talked about the PEO billing, which had a lot of charges in it, including a 3% admin charge and fees for FICA, FUTA, SUTA, and worker's compensation.

10. Found an ASO solution that accommodated all of those services and joined it with an open-market medical plan with HR services that dropped $32,000 to his bottom line.