One employee. Three states. Benefits on day one.
Try getting a group health plan for one employee. Now try it for one employee in New Jersey, while the next hire is in Montana and the one after that is in Nevada — and the company signing the checks is in Mexico and has never run U.S. payroll.
That was the call. No savings number on this one, because there was no plan to beat. The value was that the plan existed at all.
An equipment manufacturer south of the border, ready to build a U.S. sales team to serve U.S. clients and prospect new ones. Not a cheap one: top people, top compensation, and real benefits from the first day of employment — because you don’t recruit that caliber of salesperson with “we’ll add health insurance once there are enough of you.” The open market had nothing for them. Carriers don’t write a group of one. And every state that first hire touched came with its own withholding, its own unemployment account, its own new-hire reporting, its own leave rules.
Compared the PEOs that actually run multi-state U.S. employment well — not every PEO does — on benefits access for a group of one, state registrations, and how they handle a hire in a state the company has never operated in. Placed them with a PEO that put a major-medical-carrier plan on employee number one and took the state-by-state compliance off the company’s plate.
- Group health coverage from day one, on a plan a Fortune-500 employee would recognize
- Payroll and tax registration in every state they hire in, handled
- Workers’ comp, handbook, I-9s, and onboarding done by people who do it for a living
The company can hire in three states without becoming an expert in three states’ employment law. That’s the part of PEO nobody posts about: it isn’t always the cheaper option. Sometimes it’s the only option that lets you do the thing you were trying to do.
Sometimes a PEO isn’t the cheaper option. Sometimes it’s the only one that lets you hire the people you actually want.Jeff Gibson, SHRM-CP · Founder & PEO Advisor
If you’re hiring across state lines — or hiring your first U.S. employee from outside the country — and nobody has told you how the compliance side works, talk to us before the offer letter goes out. See the multi-state employer page and the first U.S. hire from Mexico page.
Names withheld on purpose. The numbers are the point, and our clients’ business is theirs. See every client result →
Frequently asked questions
Can a PEO really provide group health coverage for one employee?
Yes. Because the PEO is the plan sponsor for thousands of worksite employees, your one employee joins an existing large group. That’s the whole reason it works when the open market says no.
Does the company need a U.S. entity first?
For a PEO, yes — co-employment requires a U.S. employer with an EIN. If you don’t have one yet, an employer-of-record arrangement is usually the first step, and we’ll tell you which one you actually need.
What does “multi-state” involve that a single-state employer never sees?
State income-tax withholding, a separate unemployment insurance account in each state, new-hire reporting, paid-leave and sick-leave rules that differ by state, and workers’ comp requirements that differ by state. A PEO that runs multi-state employment well handles all of it under one payroll.
Was there a cost saving?
No, and we won’t invent one. There was no existing plan to compare against. The value was compliance and the ability to recruit the people they wanted.