Area employers exploring group insurance

'Outsourcing' administrative duties to organization may allow for employers to pay cheaper rates

The cost of health insurance in rural areas has skyrocketed over the past several years, forcing some area businesses and non-profit organizations to explore new ways to deal with the rising costs.

Several bills in the state legislature dealing with rural health insurance have been created, but none have passed.

The issue is on the agenda again this year, but no clear solutions have been presented.

In response to the lack of legislative action, two workshops were held in Steamboat Springs on Tuesday to introduce interested companies to Professional Employer Organizations.

A PEO is an entity that hires itself out to run the administrative duties of a small company or non-profit organization, which would then allow the PEO to apply for health, dental and life insurance as one large group.

"The typical employment responsibilities of a small business payroll, benefits, workmans' comp, administrative work - would be outsourced to the PEO," said John Thrasher, Human Resources Director at the City of Steamboat Springs. "That organization can now have the purchasing power of a large group. With health and dental insurance, it's cheaper with 200 or 300 people in a program than what's available to a 10-person company."

According to Thrasher, the benefit of joining a Professional Employer Organization is twofold: Without administrative responsibilities, an employer now has more time to concentrate on the actual work of the company, and receive insurance coverage at more reasonable rates.

"The PEO will offer a truly professional Human Resources program," he said. "There are so many federal mandates and responsibilities, and they're constantly changing all the time. It's hard for smaller employers to keep up with what's current.

"Businesses will have more time to do what they do best," he said. "And have access to more affordable insurance."

Grand Futures Executive Director Kent Neilson attended one of the PEO workshops because of his interest in finding more affordable insurance rates.

"The cost of health insurance has gone sky high, and that's a concern for me as director of Grand Futures," Neilson said. "It's becoming cost prohibitive. We saw a 44 percent increase from last year. That's astronomical."

According to Neilson, Grand Futures is only interested in participating for insurance reasons, and that having the PEO cover all administrative duties is not feasible. "Really what Grand Futures is interested in is purchasing insurance at a reasonable cost," he said. "I already have staff to handle administration and payroll and things like that. If we can choose to be a part of the service without giving up staff, we'll join. The process isn't far enough along yet to know if that's possible."

The next meeting will be in approximately a month, and the final product of what services the PEO will offer will be more defined, Thrasher said.

"We've had enough response from the two workshops to move ahead with the program," he said. "Once we define what the product will be, we'll move to talk to the communities, perhaps through the local Chambers of Commerce."

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