This Series is supported by PEO Spectrum, the Resource for Shopping, and Comparing HR Outsourcing and Professional Employer Organization providers.

By: Thomas Farrell

7/15/10

As annual health renewal increases are starting to roll in from Trinet, Alphastaff, Paychex, Oasis, etc.  Some PEO clients are going to be feeling the pressure.

All of the above mentioned PEOs work with Aetna, who has new rules for the PEO industry that greatly reduces the opportunity in switching PEOs in order to save costs and get out of huge health renewals.

Some PEO Shoppers may be taken back when a competing PEO sales person requests renewal rates to provide a quote. This is not a sales-trick, this is a mandate from Aetna saying we're not interested in PEO swapping clients anymore. From their perspective it makes perfect sense, if a company gets a 50% increase from PEO A, it's for a reason, it means they've made more claims than the premiums collected, and Aetna is losing money. In years past, PEO B could enter this situation, provide rates that do not reflect the renewal rates, and easily gain a client. It's not so easy anymore.

There are several strategies that can be deployed to manage around this, and more now than ever the quoting and underwriting process must be strategic, timely, and sensitively approached.

When dealing with a PEO, make sure you are speaking to a tenured, experienced salesperson that understands how their underwriting process works, so that you don't get the short end of the stick by an underwriter digging their heals in..

At PEO Spectrum we understand each PEO's underwriting process, we're in touch with management teams, we consistently achieve better results for our clients we understand how underwriters perceive risk, and we know how to present our clients.

Just as a financial advisor follows the markets for their clients' portfolios, we follow the cyclical, diverse, and increasingly difficult world Professional Employer Organizations and HR Outsourcing firms. We also develop strategies for companies to leave the PEO and build an in-house HR department.

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