Growing your Startup with Help from a PEO
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.
- 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)?
EM: Understanding the difference between a PPO and an EPO medical insurance plan option can help you choose the right plan for your team. With any plan, always check the provider network to be sure that your providers are in the network.
PPO: Offers access to a network of doctors and providers who accept insurance payments at a certain rate for members. Members of a PPO have the flexibility to see any provider they want in the specific network; using out-of-network providers will tend to cost more.
EPO: Offers also provide access to a network of doctors and providers who accept insurance payments at a certain rate for members. Although there is flexibility to see any provider they want in the specific network; there is no coverage for using out-of-network providers except in some emergency situations.
Justworks plans are all national, open access, non-gated plans. This means that you can access care nationwide, you do not need to choose a primary care physician, and you don’t need a referral to see a specialist. They also include awesome perks in addition to the coverage provided by the plan, they include: Membership to One Medical, Teledoc, Talk Space, Class Pass, Citi Bike, Health Advocate.
7. THE GUTS TO TRY QUESTION: Entrepreneurs and founders take on calculated risks when starting their business. In 2019, the failure rate of startups was a staggering 90%. What has been the biggest risk you have taken in your professional career, and what have you learned from it?
EM: I started my career at Horizon Media — a large and profitable corporation. It was an incredible honor to work for a company that truly put people first. It was there where I learned the importance of forming good relationships with sales agents to negotiate the best price and value for their ad campaigns. After spending a year learning the buying side of the business, I became interested in the sales cycle of the company. I wanted to try out the sales field to see if I could have any success and I knew that I wanted to develop those skills in a small environment.
I took a very scary leap of faith and applied for a position in a small startup. From the very first interview, I was intrigued. I took a job with no experience in sales and the very first day on the job I thought that there is no way I can do this job. I came back to the office on the second day and just decided to trust the training process. The quality of the training and the level of energy in that environment was absolutely amazing. I could not wait to get to work and learn more. Over the period of three months, I met some of the most motivated people I have ever met.
Just when my sales career was starting to kick in, there was a major restructuring and just like that, my dream job was gone. More than anything, I knew that I would miss going into that small, loud and inspiring office. I spent some time second guessing my decision to leave a stable environment for a small, new one. But, all of those affected by the restructuring banded together and those who were in management positions made it their mission to help the rest of us find opportunities which was amazing since I had only known these people for a few months! A contact from that company recommended me to Justworks and I have been here ever since. To this day, although I am not thankful that I lost that job, I learned that there really are great people you can meet throughout your career that go out of the way to help you succeed.
