Mark Marcon: That’s a great point. And then, on the PEO side, just one question with regards to the insurance costs. On an apples-for-apples basis, what sort of price increase are you seeing for similar plans relative to what was offered last year through your various health insurance partners for this coming enrollment season?
John Gibson: Yeah, look, you’re pointing to an item which I think is a tailwind that I think will continue to evolve, and that is healthcare inflation. And really, I think you’ll see that evolve in the future post-pandemic. Pushing costs through the health system is a slow process. It starts with more expenses at the hospital. They have to negotiate with carriers. They have contracts that takes years to do. In our local community, there’s unionization and strikes going on at the local hospital for more pay. Then that has to get approved by state legislature. So, the cost increase that we saw inflationary in healthcare last two years is going to start making its way to health plan costs in the future. We’re certainly aware of that, and we’re doing things to prepare for that.
And when we talked about that last year, we did a lot of changes in our healthcare lineups to give more choices to people, making sure that we have the right plans. And I would say that our apples-to-apples was actually highly competitive to what the general inflation was, and we’re keeping our MLRs in-line to where they’ve historically been at the same time. And so, through some plan designs and some other ways in which our teams have been creative in coming up with some creative health solutions, I think we’ve got a good portfolio of products and services that our clients are finding very competitive to alternatives that they have. I don’t know if that helps.
Mark Marcon: It does. But would you say, John, that you would be looking at increases for this year in terms of — would they be higher than last year? And then, what sort of impact does that have? Does it make your PEO offering more or less attractive relative to everything else that’s out there as a small business owner that’s trying to manage through that situation?
John Gibson: Well, I would say given the results and the pipeline that I see, that’s made us more successful. That’s the results I look at. We’re not in a — we’re in a very competitive environment. So, most of the deals that we’re involved in, someone else is involved in. And I think our lineup is very comparable. I think what you would — what I would say is that we manage our plans in such a way that we tend to beat the standard health inflation and we’ve broadened our portfolio of offerings such that I think there is something for every client. They can find something that they want in our plans. And I think that breadth of services and breadth of options is one of the things that differentiates us from others.
Mark Marcon: Great. Thank you, and happy holidays.
John Gibson: Happy holidays.
Operator: Thank you. Our next question will come from Scott Wurtzel with Wolfe Research.
Scott Wurtzel: Hey, good morning, guys. Just one from me quickly. Can you remind us of what your top end market exposures are by vertical, maybe in the PEO segment? We have heard from one of your peers who is seeing some challenges sort of on the pays per control worksite employee side in PEO mostly due to some certain end market exposures. So, it would be very helpful if you guys can just remind us of where you guys have some of your larger exposures in the PEO. Thanks.
John Gibson: Scott, we do not have any high concentrations in our PEO. It’s the general market. Remember, historically, our PEO was really an upsell within our client base, our payroll client base. Our payroll client base is diverse as the country’s small business market. We didn’t originate in a vertical strategy as a business from PEO perspective, so we never got highly concentrated in any particular area. We maybe had some geographic concentration before the acquisition of the Oasis, but the Oasis acquisition really made us a broad national player. And so, there’s no one industry concentration that really drives that business.
Scott Wurtzel: Great. That’s super helpful. Thanks, guys.
John Gibson: Thanks.
Operator: Thank you. Our next question will come from Ashish Sabadra with RBC Capital Markets.
David Paige: Hi, good morning. This is David on — David Paige on for Ashish. I just had a quick one regarding the organic growth in Management Solutions in the quarter. It looks like you grew revenue by 4%, but maybe you could just — if you could remind us what the organic growth is? It looks like you had a small $200 million acquisition. So that would be helpful.
Bob Schrader: Yeah, I mean, that was a very small contributor, David, to growth in the quarter. And the other thing you need to keep in mind, we kind of gave you color on ERTC being a slight tailwind in the first half. It was actually a headwind in Q2, so most of that came in Q1. So, you kind of — you have the headwind of ERTC. You have a slight tailwind from the acquisition. But the organic growth rate is not going to be too far different from what you see as reported.
David Paige: Okay, great. Thank you. Happy holiday.
Bob Schrader: Yeah, same to you.
Operator: Thank you. Our last question will come from Tien-Tsin Huang with JPMorgan.
