PEO with Carve-Outs - Types of Professional Employer Organizations (PEOs)

Employer of Record Responsibilities

With a Carve-Out PEO:

Employee taxes reported and deposited under the PEO’s FEIN.

Considerations for your company:

Same as "Classic" PEO arrangment.

Workers’ Compensation Insurance

With a Carve-Out PEO:

Coverage may be provided by policy in clients name.

Considerations for your company:

Coverage provided under PEOs master policy.

Same as "Classic" PEO arrangement.

Coverage provided under your own "stand-alone" policy.

If your company currently has an attractive Workers' Compensation insurance policy in place, some PEOs can "carve out" your coverage under their master policy and assist you with administering your own policy. In some cases a PEO may (due to coverage limitations of their master policy) assist you with obtaining your own "stand alone" policy. Companies engaged in high risk occupations may present a challenge for a PEO and some PEOs cannot accept them. In any case a StaffMarket participating PEO should provide coverage alternatives.


Safety and Risk Management

With a Carve-Out PEO:

Claims management provided by PEO. Safety guidance provided by PEO.

Considerations for your company:

Coverage provided under PEOs master policy.

Same as "Classic" PEO arrangement.

Coverage provided under your own "stand-alone" policy.

If the PEO is assisting you with obtaining your own policy, then the PEO will take on a more advisory capacity...any adverse claims experience will affect your experience rating and not theirs.


Health Plans

With a Carve-Out PEO:

Coverage may be provided by policy in clients name.

Considerations for your company:

Coverage provided under PEOs master policy.

Same as "Classic" PEO arrangement.

Coverage provided under your own "stand-alone" policy.

If your company currently has an attractive Health Plan in place, some PEOs can "carve out" your coverage under their master policy and assist you with administering your plan. PEOs can assist you with obtaining your own "stand alone" health plan if they cannot offer coverage under a master policy.


Employee Benefits

With a Carve-Out PEO:

Supplemental benefits may be offered under PEOs master policy. 401K provided by policy in clients name.

Considerations for your company:

Same as "Classic" PEO arrangement.

Human Resources

With a Carve-Out PEO:

Multitude of services offered in either “a la carte” or bundled pricing.

Considerations for your company:

Same as "Classic" PEO arrangement.

Regulatory Compliance

With a Carve-Out PEO:

Provided by PEO.

Considerations for your company:

Same as "Classic" PEO arrangement.


Several forms of PEO relationships are available to most businesses and many PEOs can offer multiple options. Let StaffMarket help you find the right option for your company.

PEO solutions come in several forms. Let's find your best solution.