PEO Tools . Group plan cost comparison
PEO group plan cost comparison
One employer, three PEO offers, the same neutral math, with a three-year fee outlook. A CPA-reviewable estimate for the owner's decision.
California . Estimate for CPA review
Lowest year-one employer cost: Brightline PEO
Current ICHRA spend: $378,000/yr
Current ICHRA spend: $378,000/yr
Every figure comes from one of three sources
The math is neutral: the same cost and tax rules apply to every column. Only two inputs change, and the engine chooses neither: the employer's facts, identical in every column, and each PEO's own rate card and fee.
Employer inputthe business facts+PEO rate card and feeeach PEO's pricing, read as giventoCost and tax enginerules applied, no discretion
Source 1 - Employer input
The shared inputs, identical in every column
Owner structure
S corporation
S corporation
Owner net income
$150,000
$150,000
Home state
California (CA)
California (CA)
Employees enrolling
35 full-time
35 full-time
Coverage mix
20 single, 6 plus spouse, 4 plus children, 5 family
20 single, 6 plus spouse, 4 plus children, 5 family
Employer contribution
50% of premium
50% of premium
Health plan compared
Plan B, all three PEOs
Plan B, all three PEOs
Average employee wage
$60,000
$60,000
Total annual payroll
$2,250,000
$2,250,000
Current coverage
ICHRA, $900/employee/mo
ICHRA, $900/employee/mo
Current annual employer spend
$378,000
$378,000
Growth assumption
Headcount and wages +10% / year
Headcount and wages +10% / year
Source 2 - PEO rate cards and feesSource 3 - Cost and tax engine
Side-by-side employer cost, ranked lowest year-one first
Year-one employer cost equals the employer share of premium at 50% plus the PEO fee. The fee-outlook rows project only the PEO fee forward at the growth assumption; they isolate how each billing system responds to growth.
| Line | Brightline PEO#1Lowest year-one cost | Apex PEO#2 | Cornerstone PEO#3 |
|---|---|---|---|
| Fee structure | 2.0% of total payroll | Flat $150 per enrolled employee / month | Flat $175 per enrolled employee / month |
| Annual group health plan premium, Plan B | $460,800 | $483,600 | $472,200 |
| Employer share at 50% contribution | $230,400 | $241,800 | $236,100 |
| PEO fee, annual, year one | $45,000 | $63,000 | $73,500 |
| Total annual employer cost, year one | $275,400 | $304,800 | $309,600 |
| Change vs current ICHRA, $378,000 | Saves $102,600/yr | Saves $73,200/yr | Saves $68,400/yr |
| PEO fee outlook as the business grows, 10% per year | |||
| PEO fee, year three, headcount +10%/yr | $53,400 | $75,600 | $88,200 |
| PEO fee, year three, headcount and wages +10%/yr | $63,984 | $75,600 | $88,200 |
Which billing system is superior depends on growth and horizon. A flat per-employee fee is immune to raises: Apex and Cornerstone charge the same whether or not wages rise. A percent-of-payroll fee tracks both headcount and wages: Brightline's fee rises from $45,000 to $63,984 by year three, and roughly $10,584 of that increase comes from wage growth alone. Brightline's 2% stays the cheapest fee through year three, but the gap to Apex's flat fee narrows from $18,000 in year one to $11,616 in year three. At a sustained 10% annual payroll growth, the 2% fee overtakes the $150 flat fee at approximately year 4.9.
The owner's personal position
The owner is already an S corporation, so this sample does not rely on an entity-conversion tax case. The owner's modeled personal income tax is essentially flat across all three PEOs, varying by under $900 between offers, so it is not a differentiator. California personal income tax applies to the owner's wages and distributions, and California's high rates make the employer's premium and fee deduction more valuable after tax. That benefit is similar across all three PEOs, so it does not change the ranking. The decision among these PEOs is a group plan cost decision. California figures are a modeled estimate: it is an own-base state that does not follow the federal self-employed health coverage deduction, and the personal exemption credit and the high-income mental-health surtax are not modeled.
One cost shift to disclose. Under the current ICHRA, the employer funds $900/employee/month and employees buy their own individual-market coverage. Under a PEO group plan at a 50% employer contribution, employees collectively pick up the other 50% of the premium, roughly $230,400/yr for the lowest-cost option. The employer cost falls, the employee share rises, and the employer-contribution percentage is a lever the owner controls.
What each line means
Annual group health plan premium. The sum of each coverage tier's monthly rate from the PEO rate card across the enrolled mix, annualized. Employer share. 50% of premium, deductible as an ordinary business expense under IRC section 162. PEO fee. Each PEO's service fee: a flat per-employee monthly amount, or a percent of total payroll. Fee outlook rows. The PEO fee recomputed for year three assuming 42 employees and, in the second row, an average wage of $72,600. Only the fee is projected; premiums are held at current rates, with no medical trend assumed.
Basis of preparation and disclosures
Cost basis: group premium equals the sum of tier rates across the enrolled mix, annualized; employer share at 50%; PEO fee per each PEO's rate card. Tax basis: employer premium and fee deductible under IRC section 162; owner personal tax under the deployed federal engine and California rules. California: own-base state; owner personal-tax figures are a modeled estimate.
Current state modeled as a cost baseline. The owner is currently on an ICHRA. This engine does not model ICHRA's individual-market tax treatment, so the current state is represented as the stated $900/employee/month employer spend, $378,000/yr, for the cost comparison. The three-year fee outlook is a projection of the fee only, computed by applying the stated 10% annual growth in headcount and wages to each PEO's own fee formula. It assumes no change in premium rates, plan, coverage mix, or employer-contribution percentage, and is not a forecast of total benefits cost. The comparison is neutral against its inputs. Figures are model estimates for discussion with the owner's CPA, not a certified tax opinion. Assumptions: 50% employer contribution, $60,000 average wage, Plan B, $150,000 owner income, the coverage mix shown, 10% annual growth. Tax year 2026.