How To Work With An Aso

Transcription

1 A Complete Guide to Working With An ASO

2 Table of Contents Introduction 3 Big Picture Overview 4 No Co-Employment 5 Customized Employee Benefits 7 Lowest Cost Comprehensive Model 8 100% Transparent and Comprehensive Billing 10 Other ASO Benefits 12 Summary 13 The Complete Guide to Working With an ASO 2

3 Introduction As a business owner/manager, you know there are many different administrative functions that you have to balance. You are busy managing and training employees, trying to reach sales goals and in many cases wearing the HR hat in addition. Understanding your cost for administrative services requires a lot of time and effort. You have to Aind vendors, provide information for pricing quotes and then create cost comparisons to analyze the deals. Most managers/owners are concerned with getting the most value for each dollar spent on health care plans. This means for you, getting the most effective plans that will help retain and attract top talent. Additionally you must, by state law in most states, shop and secure workers compensation coverage to protect your employees as well as your business and personal assets. An ASO (Administrative Service Organization) can provide you with the necessary components, together in one package, that meet the needs of your business. This is a great alternative to the PEO model. The ASO model is very close to the PEO model. ASO s have more transparency and are lower priced. If you have purchased services and coverage s on your own through the open market, you can quickly see the advantages of the ASO as a one stop shop. When you have Ainished reading this, our hope is that you will have a much clearer understanding of how an ASO works and why it could be a great solution for your company. The Complete Guide to Working With an ASO 3

4 Big Picture Overview To put it succinctly, an ASO is a one- stop shop for employee beneaits, workers compensation insurance, payroll services & human resources. An ASO provides these services as an all in one model that helps the employer reduce time managing and save money related to various different circumstances. There are a lot of business owners that would beneait from using an ASO. Some of those could be: - Employers looking to reduce their administrative costs - Employer s who Aind it cumbersome to enroll new hires and terms in both payroll & beneaits - Employer s who understand the cost involve with non- compliance and want to reduce liability - Employers who would like some help with HR responsibilities The Complete Guide to Working With an ASO 4

5 No Co-Employment If you are currently with a PEO, you are familiar with co- employment. This simply means that your employees fall under the Federal Employer IdentiAication Number (FEIN) of the PEO. For those of you who are not currently with a PEO, this is a key component to how a PEO works. They provide a bundle of services from employee beneaits to workers compensation insurance, just like an ASO, but they take on the many liabilities under their FEIN. Additionally your company beneaits off of the buying power of a much larger group. This can be advantageous to some companies but depending on the proposal offer from the vendor, this could cost your company thousands. Knowing how to analyze the deal can become tricky if you are not well versed in PEO and ASO proposals. This is speciaically true regarding what they are going to charge your company for FUTA/SUTA, workers compensation, beneaits and administrative charges. The Complete Guide to Working With an ASO 5

6 No Co-Employment Because of this, meeting with an expert who has been in the industry for years and has multiple relationships with both PEOs and an ASO is a great idea. Connect with an Expert Under the ASO model, there is no co- employment, the employees stay under your company s FEIN. Many times this is a better arrangement for companies as an ASO s charges are much more transparent than a PEO s. If your company is currently with a PEO, you may not even be aware of how much they are really charging you for their services. You may not know that your company isn t receiving Section 125 ER FICA tax savings. Not having your employees under another FEIN gives you the ability to see exactly what you are spending when it comes to payroll taxes and other fees. The Complete Guide to Working With an ASO 6

7 Customized Benefits As you know, your business is not like other businesses. Even in your industry, you are striving to operate more competitively in order to give your customers what they need. In order to stay competitive in the market place you have to offer solid employee beneaits packages that don t break the bank. The best way to do this is by customizing plans that Ait your businesses needs. Unlike a PEO, an ASO allows your business to choose from various different health carriers and ancillary carriers to create your own employee beneaits package. If you have been with a PEO in the past, you know they have their own package of beneaits that you adopt. There is very little if any customization. This doesn t always work for companies who are trying to stay competitive. Having complete control over what your employee beneaits package looks like is 100% up to you. For example, if you are considering switching from the open market to an ASO, you may have AFLAC ancillary insurance and want to keep it. With an ASO, you can do that. If you don t want dental or vision coverage, you can decide to not offer it. This allows you to bring the freedom you have on the open market into your relationship with the ASO, while getting the upside including the convenience of the one stop shop. The Complete Guide to Working With an ASO 7

8 Lowest Cost Comprehensive Model Being on the open market has an associated cost you may not have thought about. In fact, you may think that communicating with 3 separate companies is how everyone is running their business. We want to challenge that mindset with a comprehensive ASO model. Ask yourself this: How much time could you save by only communicating with 1 company? Would that be a positive impact on your daily task list? On the open market you have 3 separate companies handling your payroll services, workers compensation insurance and your employee beneaits. They don t talk to each other. This can be a huge time zap for you or your HR manager. Connecting with each of these key service companies to make sure someone termed correctly and efaiciently can take up to an entire day of work. If it is done correctly, this one task can take several days of calls and meetings to Aix. The Complete Guide to Working With an ASO 8

9 Lowest Cost Comprehensive Model Moving your business to an ASO can give you the advantage of reducing liability. For example, let s say you termed an employee off your payroll. With an ASO, that information would go to the beneaits department who then sends out the COBRA termination letter. This means it is all coordinated. If you are doing this on your own, someone from your company will have to notify your payroll services provider, then notify your health and ancillary carriers and also send out a COBRA termination letter. So if you term someone on the payroll and notify the health or ancillary carriers, but forget to send out a COBRA letter. If this is not completed correctly, your termed employee will need medical insurance and could end up beyond the window to qualify under COBRA. This can easily become a lawsuit. So, from a compliance perspective, the ASO model makes sense. You have one company that communicates between the different departments versus 3 separate companies that don t communicate with each other. Many times company simply forget to term the employee on company beneaits. The carrier bills the company even though the employee has been long gone. How would the carrier know this if no one notiaied them? With the ASO, once you term the employee in the payroll system, the beneaits department is automatically notiaied and they in turn will notify the carrier. This alone could save the company thousands over the year. The Complete Guide to Working With an ASO 9

10 100% Transparent and Comprehensive Billing With an ASO you receive a billing report that is comprehensive and itemizes every charge. You ll also get a workers compensation report for auditing purposes. If you are currently with a PEO, you will notice a big difference here. With a PEO, you typically get a bill that includes all of the services as a percentage of their payroll or bundled billing. This can sometimes leave business owners in the dark as to how their money is being spent. As the relationship goes on it can become difaicult to know if you are being overcharged for the services you are receiving. For example, if a PEO is only adding 1% to a $1 Million dollar annual payroll with a weekly pay cycle, that s only $192/week. But that adds up to $10,000/year. The Complete Guide to Working With an ASO 10

11 100% Transparent and Comprehensive Billing For some business owners, the cost reduction of being with a PEO can still make sense even though they don t get the transparent billing from an ASO. This is where an expert s insight comes in. To determine if you are a better Ait for a PEO or an ASO, you need someone who knows both organizations to help you make that decision. Connect with an Expert If you are coming from the open market, and you have a problem with payroll and beneaits, you can call one toll free number to Aind resolution with both issues. This is a time saver and is convenient. Having your ASO expert on hand to help you resolve problems and shop beneaits every year is a real beneait. They become familiar with the plans you like and know what you are looking for upon renewal. The Complete Guide to Working With an ASO 11

12 Other ASO Benefits ASO Reports One of the most important aspects of running your business is the ability to access data to review past performance for future forecasting. The ASO has many canned reports and an unlimited number of customizable reports. These reports are an integral tool in running your business. HR Assistance More and more companies are starting to understand the value of human resources. Having good human resource policies and procedures can turn a function that used to be considered an expense into a proait center. The ASO will help with all aspects of HR, from hand book creation, to putting together that Fortune 500 type beneaits package which will help attract the best talent, to setting up polices for disciplinary action and termination. The Complete Guide to Working With an ASO 12

13 Summary When it comes to running and growing a business, reducing your cost of labor is a big deal. Reducing your liability and the time you spend related to managing your employee beneaits, workers compensation insurance and payroll services on an average day is also a big deal. Turning the HR function from and expense to a proait center is a deainite win. As you can see, an ASO can help you as a dedicated business partner as you navigate your company through the maze of business obstacles. The Complete Guide to Working With an ASO 13

14 Want more information? Connect with one of our experts to look at how you can increase savings. (407) The Complete Guide to Working With an ASO 14