When considering who will handle administrative tasks for your organization, you will likely encounter the discussion of a PPO vs. PEO. What is the difference between the two? Which is best for your organization? Every organization’s situation is different- read on to arm yourself with the knowledge necessary to differentiate a PPO vs. PEO.

PPO VS PEO: What is a PPO?

PPO stands for Preferred Provider Organization. A PPO is useful for organizations wishing to provide healthcare services to their employees without restricting their options on who to go to. PPOs emphasize flexibility and allow their subscribers to receive coverage for their medical care rather than providing a predetermined list of partners and coverages. With a PPO, you:

• Don’t need a primary care physician. When enrolled with a PPO, you can visit any specialist with or without a prior referral. This is especially important for those who move around or have rapidly changing medical needs.
• Receive non-emergency out-of-network benefits. Most healthcare plans require special circumstances or incur additional charges if you receive care from a physician out of your network. A PPO, following its goal of flexibility, provides benefits for individuals who want or need to receive care from somewhere outside their network. This is notably different from the comparable HMO, which does not offer out-of-network benefits.
• Pay more than comparable plans. In exchange for a PPO’s versatility, you will pay more for coverage here than in a comparable plan, such as an HMO. This plan may still be effective for specific individuals, but the associated costs should be considered carefully.

A PPO provides benefits to its healthcare providers in that they get access to the insurer’s network, and people receiving coverage from a PPO receive benefits in increased versatility when visiting specialists and other various advantages at the cost of paying a higher amount for comparable care. Read more about the intricacies of a PPO here.

PPO vs. PEO: What is a PEO?

PEO stands for Professional Employer Organization. These organizations often provide administrative services to their clients, including payroll administration. A PEO acts as a co-employer, allowing the organization to carry out administrative tasks in place of their clients. Outsourcing HR to a PEO can:

• Alleviate administration. Outsourcing your HR tasks to another organization specialized in the area can alleviate your company’s administration of time-consuming tasks that swallow up their time day-to-day. In addition, your administrative employees likely have skills that are better used elsewhere within the company, so alleviating HR tasks from these individuals can significantly improve how your organization functions.
• Make efficient use of capital. If you don’t want to stick administrative tasks on your managers, you may be looking at hiring your endemic HR team. This can be useful in delegating these tasks to specialists and getting them done effectively, but it may not be the most efficient use of your resources. Outsourcing these to another organization can be more cost-effective than hiring your team and will result in more robust experience in the professionals handling your HR work.
• Show your employees you care. When you outsource with a PEO like Canal HR, you receive a dedicated account executive that will be the constant contact for any of your or your employees’ concerns. Having one dedicated contact is something that puts Canal HR above the rest and is just one part of our dedication to providing our clients with the highest quality of HR services available.

A PEO can alleviate your employees, administration, and finances overall. Its effects reach farther than just HR. For more information on their services, check out this article or visit Canal HR’s website.

Why Choose a PEO?

In truth, when it comes to a PPO vs. PEO, the two are very separate. While a PPO is a network of healthcare providers, a PEO focuses on supplying human resources and other administrative services to its clients. 

A PEO can be beneficial for all levels of business, however. Every business needs to provide its employees with payroll, competitive benefits, and other staples of employment compensation. Likewise, companies must consider workers’ compensation plans, risk management, and other safety issues. Whether an enormous corporation or a family business, everyone can benefit from outsourcing their HR tasks to a group of experienced professionals. 

For more information regarding these issues, check out our blog. In addition, for more information on providing your employees with competitive benefits specifically, we have written a whitepaper containing helpful information and advice for compensating your employees fairly.

Seamless Integration with Existing Systems 

PEOs stand out for their ability to integrate seamlessly with your business’s existing systems. When partnering with a PEO like Canal HR, our expertise in handling HR tasks and integration result in a smooth transition that causes no disruption to your daily operations. Integrating our processes allows us to streamline your payroll processing, benefits administration, compliance management, and workers’ compensation, allowing you to enjoy our comprehensive suite of benefits. Opting for a PEO like Canal HR means ease of integration, ongoing support, and regular updates to ensure that your business remains up-to-date with the latest technological innovations. 

Cost-Benefit Analysis

The financial benefits of partnering with a PEO are substantial. Businesses can reduce costs associated with hiring separate providers for various aspects such as payroll, benefits administration, and compliance. At Canal HR, we handle those things for your organization and offer you the most affordable options, saving you even more due to our economics of scale. The ROI of working with a PEO significantly outweighs the cost, proving it is the most economically advantageous option. You will not only save money by utilizing a PEO but also save time in the day to work on your business operations, bringing in even more money to your organization. 

Navigating Regulatory and Compliance Complexities with a PEO

PEOs excel at managing compliance challenges, which are a significant concern for many businesses. When partnering with Canal HR, you can rest assured that we can handle all the nuances of staying current with local, state, and federal regulations, preventing your organization from facing any penalties. We work to safeguard your business and provide you peace of mind that all necessary tasks are being handled according to the latest legal standards and requirements. 

Frequently Asked Questions: The Superiority of PEOs 

Now that we’ve explained PPO vs PEO and highlighted why a PEO is the best option for an organization looking to handle HR-related tasks, we can answer some of the most common questions businesses ask before partnering with a PEO. 

How does a PEO provide more value than a PPO? 

While a PPO offers healthcare flexibility, a PEO provides a more comprehensive suite of HR services that cover payroll, benefits administration, risk management, compliance, workers’ compensation and more, all of which streamline business operations and reduce overall operational costs. 

How does a PEO enhance compliance? 

A PEO stays updated on all regulatory changes to ensure all practices abide by current federal, state, and local laws. This will significantly reduce the risk of non-compliance and any associated fees for an organization. 

Can a PEO benefit a small business? 

Absolutely! A PEO can transform a business of any size by managing HR tasks professionally. For small businesses especially, leadership wants to focus on scaling as much as possible and on growth strategies, and when partnering with a PEO like Canal HR, they can focus on those core functions without the overhead of a large HR department or the hassle of handling the paperwork themselves.

Outsource Administrative Tasks to Canal HR

If you are finding it challenging to spend time on your business, or find your own or your managers’ time being swallowed by HR tasks, consider outsourcing them to a team of professionals. Canal HR has served the southeastern United States for three decades and is dedicated to providing our clients with the highest quality human resources services. Contact us today or visit our website to learn more about how Canal HR can help your business.