Co-employment is a relationship wherein a Professional Employer Organization (PEO) acts as the Administrative employer and the client acts as the Worksite employer. These clearly structured employer roles is what define the co-employment relationship. It is sometimes also referred to as employee leasing.

The co-employment services model is based on a commitment by the PEO to share employment-related risk with clients, reducing legal risk and financial exposure for clients. The main difference between PEO/Co-employment services model and the Human Resources Outsourcing (HRO) model is that HRO companies are not employers and, therefore, cannot share employment-related risk, which leaves clients open to increased legal risk and financial exposure.

The HRB Group, as a PEO, is committed to the co-employment services model, which allows for worksite employees to be included in key insurance plans such as Large Group Medical. Participation in a Large Group Medical plan offered under the co-employment services modelcan provide extra protection for the client when facing, for example, the impact of a serious worksite employee medical condition. A client participating in Large Group Medical would not experience the same level of rate increase as the result of an expensive worksite employee medical condition that a client with their own Small Group Medical coverage would experience because the impact would be spread across or absorbed by the large number of employees in the Large Group Medical plan.

This level of protection is not available with the HRO model, which does not provide co-employment -they are not a recognized employer of the client’s worksite employees- and therefore cannot offer access or protection from a Large Group Medical plan. Clients under an HRO model would have to obtain medical insurance as a small group based solely on the medical experience of their employees. This could result in financial exposure that can last for years if a worksite employee has a serious and costly medical condition.

In addition to Large Group Medical, the co-employment services model allows for worksite employees to be included in insurance plans like Group Workers’ Compensation Insurance. It can be more difficult for a small- or medium-sized business to access cost-effective workers’ compensation insurance without the buying power of a well-managed larger group, which, once again, spreads the risk over a larger pool. Well-managed PEOs, like The HRB Group, also provide support to reduce financial and legal exposure, including back-to-work and worksite employee safety training programs.

In addition to Large Group Medical, the co-employment services model allows for worksite employees to be included in insurance plans like Group Workers’ Compensation Insurance. It can be more difficult for a small- or medium-sized business to access cost-effective workers’ compensation insurance without the buying power of a well-managed larger group, which, once again, spreads the risk over a larger pool. Well-managed PEOs, like The HRB Group, also provide support to reduce financial and legal exposure, including back-to-work and worksite employee safety training programs.

Additionally, the co-employment services model allows for worksite employees to be included in a Large Group Employment Practices Liability Insurance Policy. This policy helps protect the client in case of worksite employee lawsuits including discrimination, wrongful termination and harassment. At The HRB Group, this coverage is included with the PEO services that are provided. Under the HRO model, a client must obtain this coverage on their own as a small business, which makes the cost of coverage (including policy premium costs and deductibles) much more expensive.

The HRB Group offers PEO/Co-employment services to small and large companies, including payroll management, health care, worker’s compensation administration and retirement plans, among others.Dealing with a single vendor solution, our clients and partner companies shed time-consuming employee administrative functions, reducing costs and improving service for their employees, while adding value to our client’s bottom line.