Broker vs. PEO vs. HR Platform: How to Outsource HR and Benefits
Each one lightens a different part of the load. Here is how they differ, what you give up with each, and how to pick the right fit for your team.
The Short Answer
Outsourcing HR and benefits usually comes down to three options: a benefits broker, a PEO, or an HR platform. A broker is a licensed advisor who helps you choose and manage your health plans. A PEO, short for professional employer organization, becomes your co-employer and takes on much of the payroll, tax, benefits, and compliance work. An HR platform is software that brings payroll, onboarding, and benefits enrollment into one place, while you remain the only employer.
They are not interchangeable. One gives you advice, one changes how you employ people, and one is a tool you run yourself. Some businesses combine them, for example a broker for benefits alongside a platform for payroll. The rest of this guide covers how they compare on cost and control, and how to choose.
The simplest way to choose
Start with the task that costs you the most time, then pick the option built to take it off your plate.
How the Three Options Compare
Here is how a broker, a PEO, and an HR platform stack up on the things that matter most when you hand work off.
| Benefits Broker | PEO | HR Platform | |
|---|---|---|---|
| Who is the employer | You, as the only employer. | You and the PEO share the employer role, known as co-employment. | You, as the only employer. |
| Payroll and payroll taxes | Not part of the service, so you keep your current setup. | Typically handled by the PEO as part of the bundle. | Often a built-in feature, though you stay responsible for getting it right. |
| HR compliance | Guidance on benefits rules, with the rest staying with you. | Shared with the PEO, which typically handles much of the paperwork. | Tools and reminders, with responsibility staying with you. |
| Where health plans come from | Carrier plans that the broker helps you compare and choose. | Typically the PEO's own group plans. | Your own plans, with enrollment handled in the software. |
| How it is priced | Often paid by insurance carriers, though arrangements vary, so ask how your broker is paid. | A percentage of payroll or a flat fee per employee each month. | Typically a monthly subscription per employee. |
| How much control you keep | A lot. You make every decision. | Less over benefits and HR setup, more of your time back. | A lot, along with most of the day-to-day work. |
Details vary by provider, so ask each one to spell out exactly what is included and what costs extra.
Choosing the Right Fit
Your situation usually points to the answer. Find the one that sounds most like yours.
You mainly need help with health benefits
A broker is often the right starting point. You keep your current payroll and HR setup, and you gain an advisor for plan choices, renewals, and employee questions.
Worth knowing: a broker does not run payroll or take on employer compliance for you.
Explore benefits administration
You want one provider to carry most of the load
A PEO fits when you want payroll, benefits, and compliance support bundled together, and you are comfortable sharing the employer role.
Worth knowing: benefits typically come from the PEO's own plans, so you will likely have fewer choices.
You want to stay in charge, with better tools
An HR platform suits owners who want payroll, onboarding, and enrollment in one place while keeping every decision.
Worth knowing: you stay responsible for compliance, and the level of support varies by plan.
Explore payroll services
You want to mix and match
Combining options is common, such as a broker for benefits alongside a platform for payroll. You add support where you need it without changing how you employ people.
Worth knowing: check that the pieces work together before you commit.
Explore HR solutionsYour choice is not permanent. Many businesses start with one option and add or change another as the team grows.
Questions to Ask Before You Sign Anything
Whichever option you lean toward, these six questions get you straight answers. Bring them to every call, and compare what you hear.
What exactly is included, and what costs extra?
A good answer is specific. You should hear a clear list, plus the add-ons that would change your bill.
How are you paid, and what happens to the cost as my team grows?
Expect a direct answer about fees or commissions, and an example of how the price moves when you hire.
Who do I call when something goes wrong?
Look for a named contact or team, and a realistic response time, not a general help line.
Which compliance tasks do you handle, and which stay with me?
The answer should draw a clear line between the two, so nothing falls through the gap.
Where do my health plans come from, and can I keep my current one?
This shows how much choice you will have, and whether your team would need to switch plans.
What happens if I want to leave?
Ask about contract length, notice, and how the handoff works, before you need it.
More Questions Owners Ask
Is a PEO the same thing as an HR platform?
No. A PEO shares the employer role with you and takes on much of the administration, often including payroll, benefits, and compliance support. An HR platform is software, so you remain the only employer and do the work with better tools.
Does a PEO change who is responsible for my employees?
It shares certain responsibilities, such as payroll taxes and some compliance duties, between you and the PEO. The exact split is set out in your service agreement, so read it closely. Rules for PEOs also differ by state, so ask any PEO how it is registered where you operate.
Will my employees keep their current health plans if I switch?
It depends on the option. With a broker or an HR platform, you can often keep your current plans. With a PEO, benefits typically come from the PEO's own plans, so your team may need to change plans. Ask about this early, before anyone is surprised.
Is outsourcing HR cheaper than doing it myself?
Sometimes, and it is worth counting your own time when you compare. Add up the hours you spend on payroll, enrollment, and paperwork, then weigh that against each option's full cost, including anything billed extra.
How long does it take to get started?
It varies by provider and by option. Setting up a PEO or moving your payroll can take several weeks, and it often helps to time the change around your payroll calendar or plan year. Ask any provider for a realistic timeline before you commit.
What should I gather before I start comparing options?
A few basics make every conversation faster: your headcount, your current payroll provider, your benefits renewal date, the tasks that take the most of your time, and a rough budget. With those in hand, providers can give you quotes you can actually compare.
This content is provided for informational purposes only and does not constitute legal or tax advice. Please consult your legal or tax advisor to determine how regulations apply to your situation.
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Disclosures
We are compensated by the insurance carriers for policies you choose through us. There is no direct cost to you. Compensation may vary by carrier and product. Information on this page is for educational purposes and does not constitute legal, tax, or accounting advice. Please consult your professional advisors about your specific situation. Tax treatment of ICHRA reimbursements can vary by employer and employee. We are licensed to advise clients in Pennsylvania, New Jersey, and Delaware. Contact us to confirm availability in other states.
