The Value of Co-Employment
What is Co-Employment?
Co-employment, which is sometimes referred to as employee leasing, is a relationship wherein the PEO acts as the Administrative employer and the Client acts as the Worksite employer.
What is the difference between the PEO/co-employment model and the HRO model?
How can a PEO/co-employment model improve my financial exposure to healthcare costs?
How can a PEO/co-employment model improve my financial exposure to healthcare costs?
Oasis Outsourcing is committed to the co-employment model, which allows for worksite employees to be included in key insurance plans such as Large Group Medical Insurance plans. The HRO model cannot provide access to Large Group Medical Insurance because they are not a recognized employer of the client’s worksite employees
Participation in a Large Group Medical Insurance plan offered under the co-employment model can provide extra protection for the client when facing, for example, the impact of a serious worksite employee medical condition. A client participating in a Large Group Medical Plan 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 coverage would experience because the impact would be spread across or absorbed by the large number of employees in the Large Group Plan. This is not available with the HRO model, which does not provide co-employment 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 serious and costly medical condition.
How does the PEO/co-employment model impact workers' compensation?
Additionally, the co-employment relationship requires the PEO to share responsibility for this risk in partnership with the client. The HRO model cannot share this risk since there is no employment relationship and therefore no legal basis for providing coverage to the employees. Well-managed PEOs like Oasis also provide support to reduce financial and legal exposure, including back-to-work and worksite employee safety training programs.
How does the PEO/co-employment model offer my company protection from employee lawsuits if they arise?
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) would be much more expensive.The co-employment 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 Oasis, this coverage is included with the PEO services that are provided.
