Growing your Startup with Help from a PEO
By: Decisive Point
Tags: Startup, Entrepreneurship, Small Business, Technology

Q&A with Justworks’ Emily Mizer and Debi Jantzen of Decisive Point

Background: Emily Mizer is an Account Executive at Justworks. Justworks is a Professional Employer Organization (PEO) intended to manage employees, payroll, benefits and compliance procedures. The company’s platform offers corporate-level benefits, seamless payroll, human resource tools, and compliance support, enabling entrepreneurs to bolster their growing businesses with transparency, integrity and simplicity in mind. Emily has spent two years at Justworks helping to level the playing field for startups as they navigate the commercial market.

Emily Mizer, Account Executive at Justworks

What’s a Professional Employer Organization (PEO)?

EM: A PEO provides full service HR solutions for small and mid-size businesses. Payroll, benefits, HR, tax administration and regulatory compliance assistance are some of the many services Justworks provides to growing companies with an easy to use platform and 24/7 support.

2. Why do firms choose a PEO compared to other options?

EM: Firms really like the PEO arrangement because it provides packaged outsourced solutions for HR, payroll, benefits and compliance. By having those solutions in place, they can then focus on the day-to-day work of their primary business while relying on the PEO to handle the back end details. Because a PEO acts as a co-employer, the employees of all of the PEO’s customers have access to a pool of benefits plans normally only available to larger employers. This means that we can offer a firm’s employees richer benefit plans and more options at the same rates that larger firms enjoy. As an employer, you select the plans and providers that suit your needs.

3. What are some of the common mistakes startups make pertaining to healthcare, HR, compliance or payroll?

EM: Startups are focused on their primary mission. It can be hard to break away from that mission and dedicate time to the HR functions. One of the biggest mistakes is not having a realistic total HR strategy in place. There are serious legal and financial consequences for classifying employees incorrectly, making payroll errors and paying too much for healthcare. Starting a company is time consuming but having HR strategies in place will give the startup the advantage it needs to succeed.

4. What are some common mistakes founders make when they select their benefits plan?

EM: Many firms try to find plans on a direct basis with carriers or with brokers. Premium rates for those plans may be high because they are based on the firm’s actual size. Through a PEO, the employees of small businesses gain access to big business employee benefits, which is critical to attracting top talent.

5. What’s the difference between an FSA vs HSA?

EM: FSA’s and HSAs are pre-tax accounts you can use to pay for healthcare related expenses like co-pays, medical bills and vision expenses. Both accounts offer tax benefits and have annual contribution limits. FSA’s work on a use it or lose it basis. Any funds not spent by the end of the year will be lost. They can be paired with any Justworks medical plan option and only employees can contribute. HSAs are only available to those who have a high deductible medical plan. There are no use it or lose it rules and the funds can carry over from year to year. Employees and employers can contribute to an HSA. They can be paired with the Justworks high deductible medical plan to help pay for out-of-pocket expenses.

6. What is a PPO (Preferred Provider Organization) and what is an EPO (Exclusive Provider Organization)?