| Type of HRO Service |
Classic PEO |
Classic HRO/ASO |
| Employer of Record Responsibilities |
Employer and employee taxes reported and deposited under the PEO's Federal Employer Identification Number (FEIN). |
Employer and employee taxes reported and deposited under the Client's FEIN. |
| Workers' Compensation Insurance |
Coverage provided under PEO's master policy, with each client maintaining their individual modification rate. |
Coverage provided by client's own policy. A policy must be provided for each client individually and the client maintains their own modification rate. ASO is named as broker of record (BOR). |
| Safety and Risk Management |
Claims management provided by PEO. Safety programs compliance administered by PEO. |
Claims management provided by ASO. Safety guidance provided by ASO. |
| Health, Dental & Vision Plans |
Coverage offered under both PEOs master policy or client's own policy. |
Coverage provided by client's policy only. ASO is named as BOR. |
| Supplemental Benefits & Retirement Plans |
Supplemental benefits offered under PEO's master policy. 401(k) provided by PEO Multiple Employer Plan (MEP) or as a Standalone Plan in client's name. |
Supplemental benefits offered by client's policy in client's name. 401(k) sponsored by client may choose Stand Alone or MEP. ASO is named as BOR. |
| Section 125 Flexible Spending Accounts |
The PEO is the Plan Sponsor and is responsible for administration and testing. |
The Client is the Plan Sponsor and the ASO is responsible for administration and testing. |
| Human Resources |
Majority of human resource (HR) services are included in PEO pricing. |
Multitude of services offered in either "a la carte" or packaged pricing. |
| Regulatory Compliance |
Required to be provided by PEO |
Client's responsibility with assistance provided by the ASO. |
| Added Value to Client |
The PEO model is a shared risk arrangement through the co-employment relationship between PEO, the client, and the client's employees. Under this model, PEO assumes a large portion of the financial, occupational, and operational risks associated with the employees on behalf of the client. This model reduces the cost of maintaining and delivering services to the clients, which reduces operating costs. |
Client utilizes the benefits of a single source solution for all employee administration needs. This has the effect of maximizing control and convenience as well as reduced overall pricing. |
Human Resource Outsourcing services are very similar to the PEO model but do not incorporate the 
