Life and health insurance agents can tap a large new market of small businesses through professional employer organizations.

PEOs offer a conduit to small businesses eager to provide a selection of worker benefits–many for the first time.

Because PEOs provide services to small businesses to help them manage human resource responsibilities, they give businesses a one-stop source for the management of HR, employee benefits, payroll and workers’ compensation.

They deliver these services by establishing and maintaining an employer relationship with the employees at each business’s worksite. They contractually assume certain employer rights, responsibilities and risks, giving small businesses a way to offer a comprehensive HR package at a lower cost than they could offer themselves. And they relieve the businesses of the burden of establishing an in-house HR and benefits department and negotiating for competitive benefits piecemeal.

Most purchase and deliver these plans through insurance agencies and brokers and administer the benefits for covered workers. Others use relationships with insurance agencies to help create individual programs for member companies.

Health care plans are one of the most important benefits PEOs offer. Other choices include supplemental health plans, 401(k) programs, employee assistance programs, life and disability insurance, workers’ compensation, Section 125 cafeteria plans, and flexible spending or health savings accounts.

As plan sponsors, PEOs also assume the burdensome and often complicated regulatory requirements of HIPAA and COBRA and the details of plan enrollment and administration. For businesses that elect to sponsor their own health plans, PEOs provide assistance in complying with regulatory requirements.

PEOs and their members represent an expanding market. The PEO industry produces about $51 billion in gross revenues annually and serves more than 100,000 small businesses. About 700 PEOs operate throughout the United States, providing access to employee benefits for two to three million working Americans.

They represent a stable market. In fact, PEOs have a client retention rate of 89%, according to a study of members of the National Association of Professional Employer Organizations.