Why Companies Should Provide Group Insurance Benefits
Besides showing that you care, providing health care to employees has other perks too. Learn why your small business should provide group insurance benefits.
Offering health insurance for your employees may soon not be a requirement, due to changes to the Affordable Care Act. In fact, if you’re a small business owner with fewer than 50 employees, you’re not required to provide group insurance benefits at all.
Regardless, offering it has huge benefits for both you and your employees. You’ll have healthier and happier employees, and, bottom line, it’s just good business. After setting up business insurance, group health insurance is the next thing you should be thinking about.
Still not convinced? Here are several reasons why it’s a good idea to offer group health insurance benefits.
Healthier and Happier Employees
People who have health coverage are more likely to obtain medical care when they need it. This includes preventive services, which may help your employees avoid more serious health problems.
When people have sufficient health coverage they often take an active role in maintaining their health, because they have access to services they may not otherwise be able to afford. This leads to employees who are sick less and spend more time at work being productive.
A recent study showed that working Americans without health care coverage were more likely to receive too little medical care or none at all.
This can cause a stressful work environment. If Jane is thinking about how she’s going to pay to get that weird mole checked out, or if Dick is thinking about how he’s going to pay for his routine colonoscopy, they’re not thinking about work.
Healthy employees mean a healthier and happier workplace. Your employees are taking less sick days. And there’s a lower likelihood of employees needing time off for a major illness or disability.
This can lead to higher productivity overall, which means more money in your pocket.
Offering group insurance benefits also ensure that the costs for medical services will be affordable. Out-of-pocket medical bills can add up quickly.
If an employee without insurance suffers from a major illness or injury or is in need of addiction counseling, the medical cost could be substantial. Most people are unprepared for additional and unexpected medical bills.
Some people are one large hospital bill away from bankruptcy. This can put employees in an unforeseen financial situation.
Here’s a list of the cost of average hospital charges.
And a cost comparison of being insured and uninsured.
If employees are stuck paying medical bills they can’t afford, this not only affects their productivity at work, but it might lead to them taking on a second job. Or it might force them to find work that offers group insurance benefits. In the long run, offering group health insurance benefits could save both you and your employees’ money.
When an employer incurs expenses related to health insurance, for both employees and their dependents, these costs are 100% tax-deductible and are considered ordinary business expenses. This is a deduction for both state and federal income taxes.
If you’re a small business owner that pays at least half of your employee’s health care premiums and have 25 or fewer full-time employees who earn less than $50,000 per year, then you qualify for a tax credit of up to 50% of premium expenses for any two years. This helps offset the cost of the premiums you would pay.
Click here to find out if you indeed qualify for this tax credit.
Unsure of the cost to you? You can get a free health insurance quote from this company.
In addition, it benefits your employees too. One option for your employees is for them to contribute to the cost of health insurance on a pre-tax basis. That means you deduct the cost of the premium from the employee’s paycheck before state and federal taxes are calculated and deducted.
This increases your employee’s take-home pay, which subsequently lowers the amount of their taxable income. If paying out of pocket post-tax, employees would have to pay 30-40% more for the same insurance. It’s a win-win.
Better Recruitment and Retention
Offering health care coverage is a huge bonus for employees looking for work. Given the option, most would choose to work for a company that offers it, especially if they have a family to support.
Current employees are more likely to be happier with their work, healthier, and work harder. They see the benefit of being employed by a company that wants to ensure their good health.
Think of the cost of replacing and training a new employee. It’s a lot more than providing group insurance benefits.
In fact, most employees would prefer the benefit of health insurance over paid time off, a retirement plan, or even a higher salary, given the choice.
For even more employee bonus points, you may want to think about offering dental or life insurance.
How Do I Set up Group Insurance Benefits?
It’s much easier than you think. Plus, there are professionals available to do the heavy lifting for you. A broker or health insurance advisor can guide you step-by-step through the whole process.
A health insurance agent will:
- Help find the perfect plan for you and your employees.
- They’ll gather information about your business and what kind of coverage best suits the people who work for you.
- Set everything up for you, and be available to answer any questions you or your team may have.
- They’ll be your go-to person from then on, always keeping you up to date with any necessary changes.
Group Health Insurance Benefits Everyone
As you can see, offering group insurance benefits lead to healthier and more productive employees. It’s a tax deduction and can be a tax credit for you.
It also saves your employees more money and is preferred over any other benefit you may offer. It helps recruit and retain good employees.
Finally, with the right agent, it’s super easy to set up. If you were on the fence about this decision, hopefully, you’re convinced.
For more articles and tips to help your small business, check out our blog.