This is a topic or question we hear quite often. Usually it is the client company posing the question.
The easy answer is that the employees of a PEO have access to the benefits package normally only seen at a Fortune 500 company. That is, major medical, dental, vision, 401k and various other insurance products. The economies of scale that the PEO enables for its client companies allows the employees to save quite a bit on the cost of benefits.
The longer answer is that the PEO has the human resources expertise to be sure that its shared employees are taken care of from a risk management standpoint as well. We often have business referred to us from employees of companies that were in a co-employment arrangement at a previous employer and have seen the benefits first hand.