If you’re like most business owners, you want to offer health insurance to your employees. After all, it’s a great benefit to have and one that can help attract and retain the best talent.
There are many reasons why offering insurance is a good idea. For one thing, it helps attract and retain good employees. Employees who have access to insurance are more likely to stay with a company than those who don’t.
In 2017, a survey from LendingTree showed that about 33% of individuals turned down a job offer because the company lacked benefits. In addition, about 32% in the US emphasized that they would love to see improvements in their employer’s health plan.
Are You Required To Provide Health Insurance?
If your company has more than fifty full-time and part-time employees, then you’re legally required to offer insurance to your employees. This is per the Affordable Care Act (ACA). However, it is not mandatory for small businesses. Although it’s not a legal requirement, providing your employees with health insurance is still recommended.
This type of benefit can go a long way, especially when attracting and retaining a well-deserved workforce. Besides this, the government also imparts multiple incentives to make providing insurance to employees easier.
It’s essential to know that a health insurance advisor quotes medical insurance. Thus, it’s best to look for one and ask about getting an insurance plan for your employees.
How Does Health Insurance for Employees Work?
The health insurance plans you offer to your employees are group insurance plans. It’s considered a single plan that can give all your employees coverage. In addition, this plan is generally paid monthly and based on your business location, the number of employees you have, and the age of your employees.
Reasons Why You Should Provide Health Insurance
The following are several reasons why you should provide health insurance to your employees:
If you want to provide health insurance to your employees, a insurance broker can help you through the whole process. They’ll be responsible for doing the following tasks:
- Help you choose an efficient plan for you and your staff, depending on the coverage preferences and the industry to which your business belongs.
- Sets all the necessary documents you might need for enrolling in a group health plan.
- Be the resident health insurance advisor for your employees so that you don’t have to worry about answering questions concerning everything about small business health insurance.
Lower Monthly Premiums
Providing health insurance to your small business employees makes sense since there’s a reduced price on getting a group health plan. Most of the time, small business insurance plans have lower monthly premiums than those offered in the individual market.
In 2018, an eHealth study revealed that the average monthly premium per individual through a small business insurance plan is about $409. On the other hand, an individual insurance plan is usually around $440. Furthermore, the study highlighted the 7% difference between the two insurance plans.
Tax benefits are the financial advantage you can gain from providing your employees with insurance. The following are some ways a group health plan can produce tax incentives for your business:
- Offering health insurance coverage to your employees as part of their compensation package potentially means that your small business might gain an advantage from reduced payroll taxes.
- Most of the time, small business owners can subtract 100% of the cost of monthly insurance premiums they pay on group health plans from their federal business taxes.
- Generally, employees can deduct health savings account (HSA) contributions from their small business taxes.
A survey conducted by Glassdoor showed that having insurance is the most critical benefit employees receive from their employer. That’s why most employees offer insurance to their employees first and then add other employee benefits over time.
According to the study from Glassdoor, the following are the top three benefits that can make an employee happy:
- Health insurance
- Paid time off (PTO) and vacation
- 401 (k), pension plans, and other retirement plans
Boost in Productivity
As mentioned earlier, providing insurance makes employees happy. This can result in a boost in productivity. In fact, according to a study from MetLife, about 60% of employers found out that offering insurance has resulted in higher productivity levels in their companies.
How Much Will Health Insurance Cost You?
On average, health insurance premiums per employee for single coverage plans tend to cost around $5,700 in a year. In addition, an employer tends to pay per employee a total of $14,000 per year for their family coverage plans.
Moreover, according to the Bureau of Labor Statistics, insurance benefits add up to about 8% of the employee’s total compensation package across the United States.
In a Nutshell
Health insurance is an important employee benefit, and offering it can show your employees that you care about their well-being. It’s a win-win for everyone involved!
If you’re still on the fence about offering this to your employees, talk to an insurance broker or agent. They can help you understand the options and find a plan that’s right for your business.