1. Presentation for Tampa Bay Assn. of Health Underwriters

2. PEO is an acronym for a Professional Employer Organization. A PEO is a third party provider of Outsourced Human Resource, Payroll, Workers Compensation, Risk Management and Health and Welfare Benefits and Benefits Administration. PEO’s operated under the Co-Employment Doctrine. Co-Employment is a legally accepted mechanism by which the Client /Worksite Employer shares rights and responsibilities involved with the management of their Employee’s with a PEO.

3.  The modern day PEO got its start in around 1982 as what were then called “Employee Leasing” Companies. These companies however operated as “Sole employers”.  The industry grew significantly when in 1986 under the Tax Equity reform act,the government recognized the potential benefits these companies could provide to their clients  The Co-Employment doctrine got it’s start in 1992 when the State of Florida regulated the PEO Industry.  The President just signed into law the new Federal PEO Licensing law which also will have the IRS certify PEO’s. The IRS will require a surety bond to cover a portion of the payroll tax liability, background checks and audited financials. This law goes into effect 1-1-2016 to allow time for the law to be implemented. This will eliminate duplicative taxes so PEO clients will be able to move all year long without a tax liability for a mid year move.

4.  In 1986 there were approximately 50,000 employees administered by PEO’s.  Today projections from the Society for Human Resource Management and the US Chamber of Commerce estimate that there are approximately 1100 PEO’s who administer between 5,000,000 and 6,000,000 employees.  PEO’s continue to grow in Double Digits.  ADP Total Source in their Feb 13 financials stated that their PEO division grew 19% and it was their most profitable division.

5.  The average PEO client has 35 employees.  PEO’s have clients with between 1 and 11,000 Employees  PEO’s clients are in every industry from Accounting Firms to Steel Erection Companies  Nationwide the average PEO makes a gross profit of $1500 and an average administration fee of $1000 dollars per employee per year. It is higher in the Northeast.

6.  67% of PEO clients surveyed stated that they went with their PEO to save money on Health Insurance or Workers Comp. Insurance.  94% of those same clients said the reason they renewed with the PEO was because the Services offered by the PEO simplified their business operations.  Even when the PEO they were with went out of business, over 86% went with a new PEO.

7.  1900 1940 1980 1998  Case law Case law Case law Case law DFWA  Common Law Common Law Common law Common law ADA  State Laws State Laws State Laws FMLA  Local laws Local Laws Local laws USERRA  IRC IRC IRC CCBA  RLA RLA RLA DTB  FICA FICA FICA TSCA FLSA FLSA FLSA CAA NLRA NLRA RLRA CERCLA LMRA LMRA SDWA FUTA FUTA SWDA LMRDA LMRDA WPCA CRA CRA HIPAA ADEA ADEA And OSHA OSHA Growing ERISA ERISA Every VEVRRA VEVRRA Year MSHA MSHA Since JSIA JSIA FDA FDA IRCA TRA COBRA TEFRA WARN EPPA

8.  Post Employer Mandate expectations 1-Health care costs are expected to go up because young people will not participate in the plans as hoped because the penalty is too low and people who were uninsurable can not be turned down 2- The administrative burden on employers and complexity of compliance will be a nightmare for smaller employers ( non fortune 500 employers) 3- The IRS has strengthened the common ownership laws and is also hiring 16,000 new agents to audit employers to make sure they are compliant and also make sure employers with 50 or more employees are not shifting employees into corporations owned by friends /associates so as to not have to comply with the HCRA 4- Because of this above employers this year with 100 or more employees and next year with 50 or more employees who must comply with the law will be looking for alternatives and PEO’s are expanding their sales forces to solicit these (Your) clients 5- PEO’s will provide expect guidance and administration of these plans so as to free these clients up from having to worry about the HCRA. PEO’s can also in many cases lower costs with their large group health plans hence many of your existing clients will flock to PEO’s to free themselves of the burden of the act and to lower their Healthcare costs. 6- Whether you’re a P and C agent or a health agent if a client goes with a PEO you will lose one or possibly more than one revenue streams.

9.  Core Services of a PEO   Human Resources Management and Support  New Client Orientation Fair Labor Standards Act Compliance (FLSA) Wage and Hour Review of Human Resources Practices Worksite Employee Handbook  Employment Practice Liability Insurance * offered by some PEO’s General Worksite Employee Relations Issues Record Keeping and File Maintenance Worksite Employee Separation Assistance Unemployment Compensation Claims Management Equal Employment Opportunity (EEO) Compliance The Family Medical Leave Act (FMLA) Fair Labor Standards Act Compliance (FLSA) Child Labor Compliance  Payroll Services  The National Labor Relations Act (NLRA) Payroll and Tax Processing Payroll Processing- Online Internet Access and Time Entry via the Web Garnishments W-2s Online Payroll Reports Worksite Employee Pay Options Tax Deposits Quarterly Federal and State Tax Withholding State Unemployment Rate Management Compliance and Reporting Tip Tax Credit 

10.  Workers' Compensation Insurance Management  Safety and Loss Control On-Line Safety Training and Materials OSHA Compliance Instruction Assistance with OSHA Abatement Recommendations on safe workplace and best practices Train-the-Trainer Programs Accident Investigation Loss Analysis with recommendations Customized Health and Safety program Safe Driving Policy Workers Compensation Claims Management State required notice of injury filing Three-point contact  Aggressive Return to Work Programs  Hand selected treatment provider assignment Claim monitored through closure Daily on-line communication with insurance carrier Employee drug testing (if required) Pursue any reductions in indemnity payments that are allowable by law Assist to ensure lower claim cost and promotes a safe working environment.

11.  Worksite Employee Benefits Comprehensive Large Group Health and Welfare benefits including:  Medical  Dental  Short and Long Term Disability  Cancer Care,  Payroll Deducted Auto Insurance  Discounted Movie and Theme Parks Federal Consolidated Omnibus Budget Reconciliation Act (COBRA) Section 125 Cafeteria Plan Flex Plans Enrollment and Administration  401k plans and Administration or IRA for smaller Employer groups

12.  When a client chooses the right PEO, it will free them up to focus on their area of core competence, whether that is being a construction company, restaurant or a law firm. That means to focus on the areas critical to revenue generation while allowing experts in Payroll, H.R. Administration, Risk Management and Health and Welfare Benefits Administration to assume many of the legal responsibilities and liabilities involved with being an employer.

13.  First and Foremost we represent you and your clients and not the PEO. We lay out all the Pro’s and Con’s of each PEO and let your client pick the PEO best suited to their needs We pay you 50% of the commissions. This is typically more than you would make doing all the work yourself. This is because of the volume of business we do with the PEO’s. We get paid significantly more than an independent agency would that only closed a few deals a quarter. Last but not least as we work for you we follow your lead and carve out what we need to in accordance with the law