A ‘good sense’ alternative for employee health coverage
Professional employer organizations gaining clout, but at a slow rate the rise, according to the state Department of they’re not attracting swarms of businesses.
Labor and Workforce Development. PEOs had 3,021 New Jersey companies as
by martin c. daks Employee Benefits In 2007, there were 120 different PEOs doing clients in 2007, Smith said. In 2008, that number
IN THE NINE YEARS that Melba Bonelli has business in the state, and there were 135 in 2008. had grown to 3,225; this year, so far, the toal has
run Dental Choice P.C., the Marlton dentist has cally take on a small business’ employees and This year, the number has grown to 146, accord- reached 3,323 companies. That’s a fraction of
been frustrated by health care costs. President handle human resources duties, such as payroll ing to Kevin Smith, a department spokesman. the 268,237 businesses operating in New Jersey,
Barack Obama says he has a solution, but some and benefits management, may be an alter- “If you’re a 20-employee business, you’ve according to the state Department of Labor.
people say an alternative already exists: profes- native. Sheridan is chief marketing officer of got no leverage with insurance carriers,” Sheri- The relatively slow growth of PEOs in the
sional employer organizations, or PEOs. Extensis, a Woodbridge-based PEO. dan said. “You’ll probably be able to get some state doesn’t surprise John Sarno, president of
“I’ve never been able to find a plan with rea- Under a PEO, workers from multiple small the Livingston-based Employers Association of
sonable coverage and premiums that my employ- businesses are typically aggregated under a sin- New Jersey.
ees can afford,” said Bonelli, who has 10 people gle PEO-employer, giving the organization some “We get more services at a “Many PEOs could not keep their promise
— including part-timers who she said are not degree of leverage when it comes to negotiating competitive price. ... We can to keep down the increases in health care insur-
currently eligible for employer-sponsored cover- health care insurance costs. ance costs,” he said. “They could moderate them
age — on her payroll. “So right now we’re on a “We’ve been enrolled in a PEO plan for focus on our business, instead of for a year or two, but as a company’s claims rose,
low-premium, high-deductible plan that forces the past two-and-a-half years, starting when we worrying about paperwork.” so did the costs.”
covered employees to pay up to $4,500 out of only had four employees,” said Dave Klockner, Dave Klockner, Eneractive Solutions Bonelli supports Obama’s proposed public
pocket before the coverage kicks in.” vice president of operations at Eneractive Solu- health plan, as does Kelly Conklin, a co-owner
Her frustration, which is echoed by many tions, an Asbury Park-based energy engineer- of Foley-Waite Associates Inc., an architectural
small-business owners that say they’re strug- ing and project development company that sort of coverage [through the New Jersey Small woodworking shop in Bloomfield.
gling with health care insurance choices, has now has 10 employees. “Extensis’ benefits make Employer Health Benefits Program] but then “Small businesses have no bargaining
helped spur Obama to call for a so-called public good sense for us.” your rating will be based on a ‘community’ of power with insurance carriers,” Conklin said.
insurance plan, open to everyone and backed Besides the health care savings, Extensis similar businesses [with demographic character- Foley-Waite has 13 employees, 10 of whom are
by the federal government, that would compete runs the company’s 401(k) plan, which Klock- istics] that may or may not drive up your rate.” covered by a health plan that costs the company
with privately managed plans. ner said would be otherwise too cumbersome Extensis has 8,500 so-called worksite about $6,000 a month, Conklin said.
It’s a controversial idea that has generated for his small business. employees; most are in New Jersey, with 6,500 But Conklin decided against joining a PEO.
opposition from national health insurance trade “We get more services at a competitive signed up for health care plans, at rates that “We’ve been approached by