The PEO alternative for health insurance

Why companies join a PEO in the first place

A professional employer organization (PEO) becomes the co-employer of your team. You still run the business; the PEO becomes the employer of record for benefits, payroll taxes and workers' compensation. That lets it put your employees on a master health plan that pools thousands of small companies.

For a five-person startup, I understand the appeal. You get large-group plans on day one and someone else handles enrollment. The problem is what happens next.

What we see when founders show us their PEO bills

• Teaser rates that don't last. First-year PEO medical rates around $550–600 per employee per month are common in the quotes founders bring us. Two or three years later, many of the same teams are paying $1,000–1,200.
• Renewals of 40% or more. One founder told us their PEO raised premiums by about 40% in a single renewal. Another team saw a 46% increase as they grew past a headcount threshold and their introductory pricing ended. For comparison, typical employer premium growth was 6% last year.
• Fees on top of premiums. A 15-person company we spoke with was paying its PEO $125 per employee per month before any premiums. That fee grows with every hire, whether or not the hire enrolls in the health plan.
• No view into your own claims. The master plan pools your claims with everyone else's, so you can't see what's driving your costs or do anything about them.

PEO health insurance vs. Prescience

How a Prescience plan works

At Prescience, we design and run your company's health plan, from setup and enrollment to claims, compliance and COBRA. What your team gets:

• An effective $0 deductible, so the plan helps from the first visit.
• Simple copays shown before a visit, capped by a low out-of-pocket maximum.
• A broad national PPO network, plus providers we contract with directly.
• 24/7 physician-led care navigation: a care team that finds the right provider, books appointments and explains costs up front.

What your company gets: one monthly cost set in your quote, usually 10–20% below comparable fully insured coverage and fixed before the plan starts, with no admin fees. You keep your payroll provider, and the plan can start mid-year.

What changes for your employees

Your team moves from the PEO's plan to your company's own plan. In most cases they keep a broad national PPO network through the carrier and gain our care team on top. Before you switch, we check the doctors and hospitals your team actually uses so nobody is surprised.

What usually gets better: an effective $0 deductible, copays shown before a visit, and a physician-led team to message instead of a carrier phone tree.

How to switch off a PEO

1. Read your PEO contract for the notice period and the earliest clean exit date.
2. Get a Prescience quote. It takes about a minute to start, and we confirm it from your census.
3. Pick payroll: stay on the same company's non-PEO payroll, or move to another provider.
4. Line up workers' comp and state tax accounts in your own name if the PEO held them.
5. Start the new plan the day after PEO coverage ends.

I wrote a full checklist in How do I leave a PEO?, including the data to export before you give notice.

When a PEO still makes sense

A PEO can be the right call if you want one vendor for payroll, HR support, workers' comp and benefits, and nobody on your team can own them. But if health insurance is the main reason you're in a PEO, and it's your biggest cost after salaries, your own plan almost always costs less and gives you far more control.