How an AEO Supports Nursing Homes and Assisted Living Facilities in Ohio
Running a nursing home or assisted living facility in Ohio is demanding. Beyond providing quality care, administrators face rising workers’ compensation costs and complex HR tasks. The long-term care industry experiences some of the highest workplace injury rates in the nation – about 6.4 injuries per 100 full-time nursing facility workers, compared to roughly 3 per 100 across all private industries. This means workers’ compensation insurance can be a significant expense for nursing homes. At the same time, managing payroll, benefits, and regulatory compliance in a heavily regulated environment adds to the administrative burden. One solution that many Ohio care facilities are exploring is partnering with an Alternative Employer Organization (AEO) to help tackle these challenges.
What Is an Alternative Employer Organization (AEO)?
An Alternative Employer Organization is a type of HR services firm that enters into a partnership with your facility to handle many employer responsibilities on your behalf. In practice, an AEO functions much like a traditional Professional Employer Organization (PEO): it provides a suite of services including payroll processing, payroll tax filing, workers’ compensation coverage, health benefits administration, employer liability insurance, and even HR technology and training support. In essence, the AEO becomes a co-employer of your staff for these administrative purposes, sharing employer obligations with you.
Importantly, you remain in control of your facility’s operations and staff. An AEO is not a staffing agency – it doesn’t supply nurses or manage your day-to-day staffing decisions. You continue to hire, train, schedule, and supervise your employees as you always have; the AEO simply manages the back-office and compliance aspects of employment. This model was established in Ohio in 2021 to give businesses the benefit of PEO-style services without losing transparency or control. Unlike a traditional PEO, an Ohio AEO files payroll taxes under your facility’s own tax identification number (EIN) rather than under the PEO’s EIN. This means your organization retains its identity in the eyes of the IRS and receives any tax notices directly, all while the AEO handles the filings. Ohio law requires AEOs to be licensed by the Ohio Bureau of Workers’ Compensation and to uphold the same responsibilities as PEOs in paying wages, taxes, and maintaining workers’ comp coverage. In short, an AEO lets you outsource HR and workers’ comp administration without giving up ownership of your role as the employer.
Reducing Workers’ Compensation Costs
Controlling workers’ compensation costs is a top priority for nursing homes and assisted living facilities, given the higher risk of employee injuries in caregiving roles. AEOs can significantly help reduce these costs through their expertise and scale. When you partner with an AEO, they take on the responsibility of maintaining your workers’ compensation coverage and managing claims. Because an AEO pools employees from many client companies, it can often leverage a larger group for workers’ comp insurance purposes. In Ohio’s monopolistic workers’ comp system (where coverage is run through the state), an AEO will ensure you’re in the most favorable rating programs available. Some AEOs are even eligible to become self-insured for workers’ comp, meaning they directly cover claims and can pass on savings to clients if claims are kept low.
The AEO’s dedicated risk management team will work to prevent injuries and control claims costs. They may analyze your loss history and implement targeted safety training for caregivers, housekeeping, and other high-risk roles. Common nursing home injuries – like strains from lifting residents or slips and falls – can be reduced through proper protocols and training which the AEO helps put in place. Fewer injuries mean fewer claims and a better experience modification rating, which directly translates to lower premium rates. Should an injury occur, the AEO handles the claims process: filing paperwork promptly, coordinating return-to-work programs, and advocating for proper medical management. This professional claims handling often leads to faster employee recovery and minimizes costly litigation or claim disputes. Over time, these efforts help stabilize and lower your workers’ comp premiums. In sum, the AEO acts as your partner in workplace safety and cost containment, allowing you to spend less of your budget on insurance and more on resident care.
Streamlining HR Functions and Compliance
Another major benefit of an AEO for nursing homes and assisted living facilities is relief from day-to-day HR administration and compliance headaches. Payroll processing and tax filings are handled by the AEO, ensuring your staff are paid correctly and on time, with all withholdings and reports submitted to state and federal authorities. The AEO, as a co-employer, takes on legal responsibility for paying wages and payroll taxes in full and on schedule– giving you peace of mind that there won’t be any compliance slip-ups. This is especially valuable in healthcare where labor laws (like overtime rules for 24-hour staffing or rules for nursing staff licenses) must be diligently followed. The AEO’s HR professionals stay up-to-date on regulations and make sure your facility remains in compliance with Ohio employment laws and healthcare industry requirements.
In addition to payroll, an AEO can manage employee benefits and HR programs. For example, they can administer health insurance plans, 401(k) retirement plans, and workers’ compensation and unemployment claims. They may also provide HR software platforms to track time and attendance, scheduling, and PTO, which is particularly useful for assisted living facilities with many shift-based employees. Many AEOs include access to training and development resources – such as employee onboarding programs or ongoing education for topics like resident safety, HIPAA compliance, and harassment prevention. By having these HR functions centralized, your management team spends far less time on paperwork and benefits administration. This not only reduces administrative workload but also helps improve accuracy and consistency in HR tasks (reducing the risk of errors that could lead to fines or employee dissatisfaction).
Perhaps most importantly, the AEO serves as a human resources compliance buffer. They handle the complex filings (from OSHA logs to BWC reports), maintain employee records, and assist with sensitive issues like disciplinary actions or terminations in a legally sound manner. For an industry under close regulatory scrutiny, this expertise and support can be invaluable. You get the benefit of a full HR department at your fingertips, without having to build that infrastructure in-house.
A Partnership Focused on Care – You Stay in Charge
Partnering with an AEO allows nursing home and assisted living administrators to focus on providing quality care and running their facility, rather than juggling insurance claims and HR paperwork. It’s worth emphasizing that your facility retains control: you direct your staff and make all caregiving decisions, while the AEO works in the background to support your operation. This partnership approach means you gain efficiency and cost savings, but residents and staff will still see you as the employer and leader of the organization.
By reducing workers’ comp expenses and ensuring HR compliance, an AEO can even improve your facility’s financial health and staff morale. Lower insurance costs and fewer administrative distractions free up resources that can be reinvested into staff training, facility improvements, or better patient services. Employees, in turn, benefit from professional HR support and timely payroll/benefits, which can boost job satisfaction and retention. In an industry known for tight budgets and high turnover, these advantages give your facility a competitive edge.
Conclusion – Learn More About AEO Support for Your Facility
In summary, an Alternative Employer Organization can be a valuable ally for Ohio nursing homes and assisted living facilities. By cutting down workers’ compensation costs through expert risk management and taking charge of HR functions from payroll to compliance, an AEO lets you dedicate more time and resources to what matters most – caring for residents. The approach is informative and professional, never pushy, allowing you to make decisions with confidence while knowing that a team of specialists has your back on the business side of operations.
If you’re interested in exploring how an AEO partnership could benefit your facility, we invite you to reach out for more information. Fill out our online form to request details and a personalized consultation. Our team at Alternative Comp Solutions is here to answer your questions and help determine if this cost-saving, HR-streamlining solution is the right fit for your organization. We’re happy to assist you in taking the next step toward easier HR management and lower workers’ comp costs for your nursing home or assisted living facility.