| NYC Business Group
Do You Want to Offer Group Health Insurance?
Over a period, companies have realized that employees are an integral part of their success. As a result, they have devoted their resources to taking care of them the best way possible. Health insurance is one of the most sought after benefits a company can offer. However, some people do not know why employers offer group health insurance. Small companies with less than 50 full time employees are not required by law to offer health insurance coverage. However, some still find it necessary to offer coverage to their employees. Why is that? Here are some of the reasons small business owners provide group health insurance coverage:
Attract and Retain Talent
Employers providing health insurance as part of the benefits package helps attract high-quality employees and retain current staff. In today's competitive job market, offering comprehensive health coverage can give an employer a competitive edge.
Tax Benefits
In the United States, employers can deduct the cost of providing health insurance as a business expense, thus offering employees’ peace of mind knowing that they are safe. Additionally, employer contributions to health insurance premiums are often tax-deductible for employees, reducing their taxable income.
For instance, if an employer decides to offer the employees a raise equivalent to the coverage, they will end up paying more in taxes. Therefore, it is prudent to offer group health insurance coverage to minimize tax for you and your employees.
Cost Sharing
Typically, group health insurance allows the cost of coverage to be spread among the employer and employees. Therefore, employers pay a significant portion of the premium, while employees contribute through payroll deductions. This cost-sharing arrangement can make health insurance more affordable for everyone involved. It also offers both the employer and employee peace of mind.
Leverage Group Buying Power
It is important for employers to find different ways of saving money to maximize profits. Purchasing coverage for a large group of employees, employers can negotiate better rates and benefits with insurance companies. This can result in lower premiums and better coverage options compared to what individuals might be able to obtain on their own. Both the employer and employees will benefits with better premium rates and coverage options offered.
Employee Wellness and Productivity
Access to health insurance encourages employees to seek preventive care and address medical issues promptly, which can lead to better overall health outcomes and productivity. Healthy employees are more productive and take fewer sick days, benefiting both the employer and the workforce in the long run.
Legal Requirements
Finally, in some jurisdictions, employers may be required by law to provide health insurance coverage to their employees, particularly if they have a certain number of employees or operate in specific industries.
How to Decide Whether to Provide Group Health Benefits
Since you understand why you are required to offer benefits, here are some of the factors you should consider before offering benefits. These factors will help you determine whether you should go ahead and offer benefits or not:
Number of Employees
Offering group health insurance becomes more feasible and cost-effective as the number of employees increases. Smaller businesses may find it more challenging to afford group plans due to lower bargaining power and higher premiums per employee. Therefore, determine the number of employees and decide whether to offer benefits.
Budget and Financial Considerations
You are required to carefully evaluate your budget and financial resources to determine if offering group health insurance is financially feasible. Consider factors such as premium costs, employer contribution amounts, and the overall impact on your business to avoid bankrupting your business.
Competitive Landscape
Do you know that you can lose employees to your competitors just because you are not offering benefits? Employers should assess what other employers in the industry are offering in terms of health benefits and then match it or go over and beyond. Offering competitive health insurance can help you remain attractive to potential employees and retain your current workforce.
Employee Demographics & Health Needs
It is your responsibility as an employer to know the type of employees you have hired. It is essential to consider the demographics and health needs of your workforce. If your employees are generally young and healthy, they may prefer lower-cost plans with fewer benefits. Conversely, if your employees have diverse health needs or are older, comprehensive coverage may be more desirable and practical.
Feedback from Your Employees
The human resource department should conduct annual surveys to determine whether the employees are satisfied with their benefits package. It is important to consider these feedbacks and get opinions from your employees to ensure they are satisfied. With a good feedback you can determine the type of coverage to purchase, the insurance provider they prefer and the amount of money they are willing to pay.
Conclusion
Currently, employer-based insurance covers at least 159 million Americans! Group health insurance offers numerous benefits from attracting and retaining employees to tax incentives. Therefore, employers should consider purchasing the ideal group health insurance plans for their employees. Luckily, there are numerous options to choose from regardless of your budget, business size or number of employees. A personalized health benefits like a stipend or HRA can meet your budget and employees’ needs.