PEO’s required to post collateral with their high deductible workers comp carrier can enjoy significant additional profits by using a captive insurance company. The following table shows how much additional profit can be enjoyed based upon the manual rate of the PEO. The table is based upon the following additional assumptions: The aggregate of the amount of collateral posted and claims payable within the deductible obligation – 45% of manual. Marginal applicable tax rate to the PEO ownership group – 35% PEO annual growth rate over the period – 15% Results will vary from PEO to PEO.
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November 05, 2008
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