Some employers look at a professional employer organisation for workers' compensation alone, usually because their own cover has become expensive or difficult to place. That is a legitimate reason and it changes which questions matter, because the benefits conversation everybody else is having is not yours.
When the cover alone justifies it
An employer facing the assigned-risk market, or one whose classifications are hard to place, can find that access to a large provider's programme is worth more than the entire administrative fee. That is a genuine and sometimes dramatic saving. It is also the case where a provider is most likely to underwrite you carefully and take time doing it.
What to settle before anything else
The classification code for every role, in writing, checked against how the work is actually done. Then the rate per hundred dollars of payroll for each of those codes. Then what happens to your own loss experience, both during the arrangement and when it ends. Those three settle the cost; everything else is administration you are buying incidentally.
The exit, which matters more here than anywhere
An employer who entered a co-employment arrangement because their own cover was difficult will need cover again if they leave, and will need a loss history to obtain it. Ask at the outset what you can take with you and in what form. Employers who do not ask discover the answer at renewal, when they have the least room to negotiate and the most need to.
Questions people ask about workers comp peo
Can I use a PEO just for workers comp?
You cannot buy the cover separately, because it comes with the co-employment arrangement. But for an employer facing the assigned-risk market the access alone can outweigh the whole administrative fee.
What decides the cost?
The classification code applied to each role and the rate per hundred dollars of payroll for that code. Get every code in writing and check it against how the work is really done.
What happens to my loss history?
Ask at the outset what you can take with you and in what form, because you will need it to obtain cover after you leave, and by then you have no leverage to ask.