$69,000
Further overall savings
40 → 100+
Headcount supported
Bars are drawn against a 0–100% scale, so the length is the reduction itself rather than a comparison between engagements. Every figure here is stated in the text above.
The situation
A medical revenue cycle management company in North Carolina, twenty-five years old, employing about forty people. Its long-standing insurance agent had been struggling to secure a workable benefits package, for a specific and common reason: participation. The group had historically been unable to reach the enrolment levels an open-market medical program requires.
Then the company won two large contracts that would take it from forty employees to over a hundred. Hiring at that pace meant offering a full benefits menu including major medical — the thing it had never managed to secure. It also meant building an HR function and meeting wage and hour obligations in several states, neither of which existed yet.
The mechanism
Participation requirements are a hard gate in the open market. A carrier needs a minimum share of eligible employees enrolled before it will write the group, and an employer whose workforce declines coverage — often because they are covered elsewhere, or because the employee contribution is too high relative to wages — simply cannot get to the threshold. No amount of shopping fixes it, because every carrier applies a version of the same rule.
Co-employment changes the arithmetic, because the employer’s population joins a much larger pool and the participation test is applied differently. This is one of the clearest cases where the PEO model solves something the open market structurally cannot.
The outcome
The company was able to offer a Fortune 500-level benefits program including a 401(k) through the PEO, with far more flexibility on medical participation and several plan options for staff. The overall cost of medical insurance came down 29%, with an additional $69,000 in overall savings. There were further reductions on workers’ compensation and state unemployment taxes.
What this one illustrates
The savings are real, and they are not the point. This company could not hire into its own growth. A benefits program it could not obtain was the constraint on two contracts it had already won, and the cost reduction is what made the solution comfortable rather than what made it necessary.
If this resembles your situation
If your broker has told you more than once that participation is the obstacle, the obstacle is structural and it will still be there next year. That is worth establishing before you spend another renewal cycle testing the same market for the same answer.
Published outcomes follow BRG’s confidentiality standard: industry category and outcome only. Fuller detail is shared in the live discussion. Related practice: PEO / ASO Advisory.
