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When evaluating a Professional Employer Organization (PEO) for an underwriting process, it is critical for the PEO to gather comprehensive information to assess your organization’s financial stability, operational efficiency, compliance, and risk profile. A PEO acts as a co-employer, managing various human resource functions, including payroll, benefits, and workers' compensation, for its clients. To effectively evaluate a PEO, underwriters must obtain specific data that provides a clear picture of the potential client's risk.

 

So if you're evaluating the model... know that they are also evaluating you!  Here's what to collect:

 

1. Medical Information

Financial stability of medical insurance is a cornerstone of any PEO evaluation. Underwriters need to assess the potential client's medical risk/position to determine its ability to pay claims, cover liabilities, and meet other financial obligations. The documents required are:

a.) The most recent invoice

b.) A medical census with dependents

c.) Summary of Benefits Coverage (SBCs) of all plans with employees enrolled

d.) A Full Unredacted Renewal (if it's within 60 days of your desired start date with a PEO)

e.) If you are self insured, they need to see claims data and a whole host of other documents.  Call us.

 

 

2. Compliance Documentation

PEOs help you comply with numerous regulations, including federal and state employment laws, tax laws, and industry-specific regulations. Ensuring that a PEO is fully aware of your compliance needs minimizes underwriting risk and liability and maximizes the value of the relationship.

 

Details to include here:

a.) States of Operation

b.) Nature of work

c.) EPLI questionaire

d.) OSHA History

e.) Jones Act, Union, USL&H exposure (if you know you know)

f.) Current SUTA rates

 

3. Worker's Comp Claims History/Loss Experience (the last 3-5 years depending on nature of work) and Full Policy

 

 

4.) 401K Details (providing these is often not necessary but will help get a true cost comparison)

 

a.) 408 (b) (2) notice aka fee disclosure form

b.) Number of plan participants

c.) Nature of plan (MEP, SEP, etc.)

d.) Total Assets in plan

 

Conclusion

Gathering these items (or walking through our digitized version of this in our HIPAA compliant Portal) will drastically reduce the underwriting time for you and the PEOs.  If you're overwhelmed by the list or are curious about why a PEO wants or needs these things don't hesitate to reach out!