5 Reasons Why Your Business Should Offer Health Insurance
There are many benefits you can offer through your business, but there’s one winner that rules them all: health insurance. That’s because it helps keep your team healthy and happy, and providing health insurance to employees signals that you care about their well-being.
Many small business owners agree and offer health insurance benefits even when they aren’t required by the Affordable Care Act to provide coverage. Roughly one in four companies with fewer than 50 employees provides health insurance and a promising 22 percent plan to roll it out the next year.
Why do these small businesses cover their employees through group plans even though they’re not legally required to? Because it’s good for their teams and good for them. If you’re on the fence yourself, here are the top five reasons to offer health insurance to employees:
1. It’s easier than you think to offer health insurance
First thing’s first: You don’t have to do this alone. A broker or health insurance advisor can guide you through the whole shebang.
As your go-to agent, they’ll:
- Help select a plan that’s right for you and your team, based on your industry and the coverage preferences of all the folks in your company.
- Set everything up and keep you compliant on an ongoing basis.
- Be the resident healthcare know-it-all for your employees, so you don’t have to answer difficult questions on all things health insurance.
2. Health benefits make your employees happy
According to a survey by Glassdoor, employees said health insurance is, by far, the most important benefit they receive from their employer. That’s why employers should offer health insurance as their first company benefit, then add on additional benefits over time.
The top three benefits that make employees the most satisfied, according to Glassdoor’s study, are:
- Health insurance
- Vacation and PTO
- Pension plans, 401(k) & other retirement plans
If health benefits are a top priority for your employees, it should be a top priority for you. Offering it can help with recruiting and entice them to stay longer at your company.
3. It saves you money on taxes
This is a big one, so we wrote an entire post about it. In fact, employers and employees pay less for insurance when they purchase it as a group.
Savings for employees
When employees buy health insurance on their own, they have to use post-tax dollars to buy it. That is, they make money, the government taxes that money, and then they take the remaining amount to buy what they need.
But when employees buy health insurance through a group plan, they pay for the insurance with pre-tax dollars. That can save them up to 30 to 45% on their health insurance premiums.
Savings for employers
Here are all the tax savings you get by offering group health insurance:
- Employer contributions are tax-deductible
- Employer payroll taxes are reduced by 7.65 percent of employee contributions
- Employer workers compensation premiums are reduced
Paying for health benefits instead of higher salaries can save you money because you don’t pay payroll taxes and workers compensation premiums on money used towards health benefits. Plus, your employees may prefer benefits over salary as well. According to that same Glassdoor study, nearly 80% of workers said they would prefer new or additional benefits to a pay increase.
4. It can give you access to more doctors and hospitals
Group insurance networks are often larger than individual networks. That means on an individual plan, you don’t have access to the same doctors and hospitals you would on a group plan.
The network differences vary by state, but in California, networks for individual plans are typically two-thirds the size for group plans. So purchasing a group plan can increase your access to more, and often better, doctors and hospitals.
5. Providing health insurance helps boost employee productivity
A study from MetLife found that 60% of employers say offering health insurance has led to higher productivity levels. And according to the CDC, employees who prioritize preventive care—like regular checkups—get more accomplished at work.
As an employer, you want your employees to focus on being their best productive and successful selves at work. Worrying about health insurance drains their energy and time. As you know, health insurance can be a pain to set up. And if your employees are enrolled in individual plans, all of that burden of setting up and managing their plan shifts from you to them.
And there you have it. From building a healthier, happier team to actually saving money, there are many reasons to take the plunge and offer health insurance to your team. Offering health benefits signals that you care about your team, ultimately building a culture of trust.