To hear about Employee Benefits in the US, Finance Monthly reached out to Tiffany Kapp, Managing Partner at Custom Business Solutions (CBS) – Professional Employer Organisation (PEO) located in Southern West Virginia.
Tell us about the services that CBS and other PEOs offer.
Professional Employer Organisations typically provide services that help streamline essential administrative business functions, so our clients can focus on being successful and profitable.
As a PEO, CBS can pool all our clients’ employees into one large group and in return, we can then offer large group rates. We administer the employee benefits and relieve the employer of the burden of open enrolment, reconciliation and termination of benefits.
CBS enables clients to cost-effectively outsource the management of human resources, employee benefits, payroll, workers’ compensation, risk management, safety management, training and development.
What are the minimum legal requirements regarding employee benefit plans in West Virginia?
A small group can be as little as two employees. However, the small group rates are based on age and tobacco use. Joining a PEO allows a small group to be pulled into a large group with blended rates.
Could you talk us through recent legislative changes in the Professional Employer Organisation landscape?
The Small Business Efficiency Act of 2014 required the IRS to establish a certification program for PEOs. This act affects the employment tax liabilities of both the PEO and its customers and is something that gives structure to the PEO industry. CBS is currently in the process of becoming certified through the IRS.
What is some statistical evidence that you can provide on the benefits of using a PEO?
The PEO Industry has grown significantly over the past 30 years. According to a recent study noted by economists Laurie Bassi and Dan McMurrer, a business that uses a PEO has 10 to 14% lower employee turnover, grows 7 to 9% faster and is 50% less likely to go out of business.