If you're a business owner, HR leader, or CFO at a small to mid-sized company, choosing how to manage employee benefits is a critical decision. You’ve likely heard of both Professional Employer Organizations (PEOs) and group benefits brokers, but understanding how they differ—and which is right for your organization—can be challenging.
At TBC Benefits, we help businesses in Ohio navigate employee benefits with clarity and confidence. Here's a breakdown to help you make the most informed choice.
What Is a PEO?
A PEO (Professional Employer Organization) is a third-party company that enters into a co-employment relationship with your business. This means:
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The PEO becomes the employer of record for tax and benefits purposes.
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Your employees are technically employed by the PEO.
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The PEO manages HR functions like payroll, workers’ comp, benefits administration, and compliance.
PEOs bundle these services into one solution, often charging based on a percentage of total payroll.
Pros of a PEO:
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One-stop shop for HR, payroll, and benefits.
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Access to large-group health insurance rates.
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Helps reduce administrative burden.
Cons of a PEO:
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Limited flexibility in customizing benefits.
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Less control over vendors and plan design.
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Annual rate increases may be non-negotiable.
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May be cost-prohibitive as your headcount grows.
What Is a Benefits Broker?
A group benefits broker—like TBC Benefits—partners with your company to design, negotiate, and manage your employee benefits plan. We work with multiple insurance carriers and third-party vendors to create a customized benefits package that aligns with your goals and budget.
Unlike a PEO, a broker does not become the employer of record. You remain in full control of your HR and payroll processes.
Pros of a Benefits Broker:
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Fully customized plan design.
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Freedom to choose the right carriers and networks.
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Strategic guidance around cost containment and wellness.
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Transparent, consultative partnership.
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Better fit for growing companies who want flexibility.
Cons of a Benefits Broker:
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HR services are typically advisory rather than bundled.
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You'll manage payroll separately (or use a payroll vendor).
PEO vs. Benefits Broker: Key Differences
| Feature | PEO | Benefits Broker |
|---|---|---|
| Employer of Record | Yes | No |
| Custom Benefits Options | Limited | Fully Customizable |
| Payroll & HR Integration | Included | Partner with external providers |
| Carrier Access | Limited to PEO's plans | Multiple national and regional carriers |
| Cost Transparency | Often bundled, less transparent | Clear fees and plan pricing |
| Best For | Startups, very small teams (<50) | Growing businesses (50–250+) |
Which Option Is Right for Your Business?
Choosing between a PEO and a benefits broker depends on your company’s size, structure, growth stage, and strategic goals. While both offer ways to manage employee benefits and HR responsibilities, they take fundamentally different approaches—and one may be better aligned with your business needs than the other.
A PEO Might Be Right If:
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You’re a smaller company (under 50 employees) with limited internal HR resources and no desire to manage payroll or compliance in-house.
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You want a fully bundled solution, where one vendor handles everything—benefits, HR, payroll, compliance, workers’ comp.
However, it’s important to note that as your company scales beyond 50–75 employees, PEOs can become more costly and restrictive. Many growing companies eventually outgrow the “one-size-fits-all” model that PEOs offer.
A Benefits Broker Is the Better Fit If:
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Your business has 50 or more full-time employees, and you want to take advantage of your own group buying power.
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You want full control over your benefits strategy, including plan design, carrier selection, network access, and cost-containment tools.
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You're looking to customize your offerings—such as health, dental, vision, voluntary benefits, wellness programs, and HSA/FSA options.
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You need a strategic partner to optimize plan performance year-over-year—not just handle transactions.
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You value transparency and flexibility in how your benefits are priced and managed.
With a benefits broker like TBC Benefits, you gain a long-term partner who works in your best interest, rather than bundling services that may or may not serve your team. We build strategies to support your retention goals, company culture, and budget—while making sure you're always compliant with changing healthcare regulations.
Growing Companies Need Strategic Flexibility
As companies grow, so do their expectations around employee experience. Talent acquisition, retention, and company culture become top priorities. A broker gives you the freedom to adjust your benefits package over time, implement wellness programs, and explore advanced funding models like level-funded plans to reduce long-term costs.
In contrast, many businesses find PEOs become less cost-effective and too rigid once they pass 75–100 employees. The lack of control over plan design, vendor choice, and pricing transparency often outweighs the initial convenience.
Let’s Talk Strategy
If you’re just starting out and want an all-in-one HR solution, a PEO could be a good short-term fit. But if your company has 50–250 employees and is looking to maximize value, control, and customization, working with a group benefits broker is typically the better long-term strategy.
At TBC Benefits, we don’t just sell insurance—we become your benefits advisor and HR strategy partner. We help you cut costs, reduce administrative complexity, and design a benefits package that supports your people and your business.