Using a PEO is often the easiest way for small and medium sized companies to offer their employees a comprehensive employee benefits package. Can offering an employee benefits package help your company?.... just look at these survey results. According to a study done by EBRI/CHEC/BCBSA 2000 Small Employer Health Benefits Survey:
See how your company compares in offering employee benefits. Review the United States Department of Labor document for:
Employee Benefits in Small Private Industry Establishments, 1996
Health insurance premiums paid by employers on behalf of workers are tax deductible for employers as a business expense. Health insurance premiums paid by employers are treated the same way other labor costs and general business expenses are treated under the tax code.
The amount that employers pay on behalf of their workers health premiums is excluded, without limit, from workers' taxable income. If a worker purchases health insurance directly from an insurer, generally only a portion of the premium can be deducted from his or her taxable income. For individuals who do not receive employment-based health benefits, total health care expenses (including premiums) are deductible only if they exceed 7.5 percent of adjusted gross income, and only the amount that exceeds 7.5 percent of adjusted gross income is deductible.
Because the costs for employee benefits continue to rise, savvy companies are joining a PEO to offset rising costs. For an overview of health insurance price increases visit this link.