Insurance · July 3, 2022

What You Need to Know About PEO Group Health Insurance

People also commonly refer to this type of plan as employee-sponsored, voluntary, or third-party management insurance. It’s not the same as COBRA continuation coverage or other forms of extended benefits. Instead, PEO group health insurance provides funding for benefits directly to your organization instead of individual employees.

Carrying the risk of offering health insurance is expensive for small businesses and new companies with limited resources. PEO group health insurance offers advantages to companies with fewer than 50 employees and typical employee turnover below 25 percent. You get an administrator that manages premiums, claims processing and other tasks without requiring you to cut a check every month. As a result, you save time and money while remaining compliant with Affordable Care Act (ACA) mandates. Read on to learn more about how PEO group healthcare works so you can decide if it’s right for your company.


What You Need to Know About PEO Group Health Insurance

PEO Group Health Insurance

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People experience stress in different ways and at different times in their lives. For many employees, the stress of balancing work and home life can be particularly challenging. When you have a demanding job and cannot make time for yourself or your family, it can have serious consequences. Stress is the leading cause of unplanned absence from work among professionals today, as well as the principal reason they leave their jobs. Whether you’re at a new job or working somewhere that you feel doesn’t give you enough support, making changes to your healthcare benefits isn’t always easy. However, by understanding your options and learning more about PEO group health insurance plans, you can find the right solution for your specific needs. After reading this article, you will understand what a PEO plan is; if it’s right for you; why PEOs are beneficial to employees; what benefits it provides; how it’s funded; and how to get one if your company does not currently offer them.

What is a PEO Group Health Insurance Plan?

A PEO group health insurance plan (also known as a PEO healthcare or PEO healthcare plan) is a type of managed health care program offered by a professional employer organization (PEO). PEOs are companies that provide HR services, such as payroll and benefits administration, to other businesses. A PEO group health insurance plan takes care of paying the premiums and managing the claims process for your health insurance. You’ll have one insurance card, and your PEO will deal with your insurance provider. As an employee of one of the companies that has contracted with the PEO, you’ll be able to take advantage of the coverage offered by the PEO healthcare plan. PEO group health insurance plans are not the same thing as COBRA continuation coverage, which you can elect after leaving a job.

Why Are PEOs Beneficial to Employees?

If you work for a company that doesn’t offer health insurance, or if you’re looking for a new job with better benefits, you may be wondering why PEO group health insurance plans are beneficial to employees. PEO health insurance plans are beneficial to employees for a few reasons. First and foremost, employees who have access to better healthcare coverage are less likely to experience work-related stress and have unplanned absences due to poor health. With access to better coverage, employees can get the medical care they need and have a higher chance of staying healthy and productive. Second, PEO health insurance plans are beneficial because they allow employees to maintain their current healthcare provider and stay with their existing coverage if they’re happy with it.

How Does a PEO Group Health Insurance Plan Work?

A PEO group health insurance plan works similarly to a traditional health insurance plan. You and your co-workers pay your premiums to the PEO, and they in turn pay your health insurance provider. The PEO also handles all aspects of the claims process. You’ll likely have a primary care physician and specialists that you see regularly. You’ll also be able to visit other providers and use other facilities as needed. Depending on your plan, you may also be able to visit a walk-in clinic or urgent care center. You can select the PEO health insurance plan that best meets your needs and budget. With PEO health insurance plans, you do not have co-payments or deductibles, so you don’t have to worry about paying for your medical care. You’ll have one premium payment and one claims payment each month.

Why Is There Confusion About PEOs?

There is some confusion about PEO group health insurance plans not only because there are different types of PEOs, but also because some businesses are incorrectly labeled as PEOs. PEOs are not insurance companies; rather, they provide HR services, including insurance. PEOs have access to a wide variety of health insurance plans, so they can help you find the coverage that’s right for you. Depending on your needs, a PEO group health insurance plan may be the best choice. PEOs are also beneficial because they are not limited by state health insurance regulations. This allows them to provide more options, such as disability and dental insurance, than employers who must adhere to state regulations.

When Is a PEO Not the Right Choice?

If you’re looking for a more customized plan that doesn’t follow the PEO group health insurance model, you may want to consider talking to your employer about offering a self-funded health insurance plan. There are also other types of insurance that can be beneficial for employees, such as a health savings account (HSA) or a health reimbursement account (HRA). A health savings account allows you to set aside pre-tax money for health expenses. With a health reimbursement account, your employer will reimburse you for the money you spend on healthcare.


A PEO group health insurance plan can provide you and your employees with excellent healthcare coverage at a low cost. A PEO plan can also help you find a solution for your employees who don’t have access to affordable health insurance. With a PEO health insurance plan, you can rest assured that your employees have access to high-quality, affordable healthcare.