Posted in Offering health benefits

Should I Offer Health Insurance to Employees?

There are a lot of benefits dancing around out there. But out of all the perks, health insurance takes the stage. This is because keeping your team healthy is one of the most important ways to show them you’re grateful for all that they do. In fact, many companies agree — even if they aren’t required to provide coverage under the Affordable Care Act. A little over one in four companies with fewer than 50 employees provide health insurance, and a promising 22 percent plan on rolling it out next year.

Beyond the feel-good aspects of offering health insurance, there are also a bunch of reasons to provide it that are backed up by research. Check them out:

Health insurance…

1. Makes your team happy

Glassdoor recently surveyed employees on how 54 benefits influenced how satisfied they were with their jobs. They found that health insurance was, by far, the most important of all the benefits. That’s why it’s important to use health insurance as the base, and then fold in additional benefits if and when it makes sense.

Top three benefits that make employees feel satisfied

  1.     Health insurance
  2.     Vacation and PTO
  3.     Pension plans, 401(k) & other retirement plans

2. Helps you follow the rules

If you have 50 or more full-time equivalent employees, or FTEs, then the ACA requires you to offer health coverage. It’s a clear-cut rule that makes everything clearer in the end. All you have to do is figure out how many FTE employees you have. Not to worry — we’ve got you.  

3. Reinforces your culture

When someone starts a new job, fussing with all the intricacies of health insurance can feel like it’s way too much to handle. If an employer takes that part off of everyone’s plate, new employees can instead spend their time getting used to their new role and their new team. Not to mention, cutting out the health insurance part will make the onboarding process much more enjoyable.

4. Saves you money on taxes

Health benefits helps you bring on awesome people, but it also allows you to stay ahead of the curve on the tax front. Basically, the payroll reductions for health insurance are tax-free. Therefore, if you take out the amount your team spends on their premiums before taxes, you’re effectively paying your team less, which means your payroll taxes are also smaller. Your contribution to their premiums is also tax-free — pretty cool, right?

If you have 24 folks or less on your team, then you may be able to grab a sprinkling of money through the small business health care tax credit. The credit equals up to half of your premium contributions if you’re a small employer, and for tax-exempt companies, it covers up to 35 percent.

Can you check off each of the points below? Then our crystal ball says the tax credit could be in your future:

  • You buy your plan through the Small Business Health Options Program, called SHOP
  • Your team has an average salary of $50,000 or less
  • You pay at least half of everyone’s premiums

Be sure to check with your accountant or broker to get a final call on your eligibility status. They’ll also be able to help you take advantage of any retroactive tax credits you’d be entitled to.

When you introduce health coverage at work, a wave of positivity washes over everyone involved. It helps you stay compliant, saves you and your employees money, and keeps your team happy and energized. It also eclipses many of the other benefits that you may have been considering. Flip through all the reasons above, find what speaks to you, and pretty soon, your decision to offer health insurance will become as clear as day.