Whether you’re looking to exit a PEO agreement or move into one, getting the timing right is everything — the right timing will ensure that your employees get the most of out the PEO.

If you’re leaving the PEO, remember that some have a rate renewal date that is not the same as the overall plan renewal date. A smart PEO exit strategy aligns with the plan year renewal, not the PEO rate renewal. Knowing the difference between the two will help you avoid subjecting your employees to a short plan year where their deductibles and out-of-pocket maximums reset before the full 12 months.

On the other hand, if you’re looking to move into a PEO agreement, you can do it anytime during the year. The key to successfully moving into a PEO agreement in the middle of the year is to negotiate up front so that your employees will receive the deductibles and out-of-pocket maximum credits that they otherwise would have had for an entire 12 months.

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