Retirement plan sponsors are the first, and most important, line of defense in providing employees with well-managed retirement savings plans.
There’s really no way around it—providing quality health insurance for your employees is expensive, and many small businesses struggle to find affordable plans on their own. Group health insurance plans offer benefits to a group of members that typically consists of a company’s employees. Having the purchasing power of a larger group enables employers to obtain insurance at a lower cost because the insurer’s risk is distributed across a larger pool of policyholders.
Here are some key highlights of group health insurance plans from Investopedia:
- 6% of the U.S. population is covered by group health insurance.
- The average group health insurance policy costs a little more than $7,400 annually, with employers paying approximately 80% and employees paying the difference.
- Group members receive insurance at a reduced cost because the insurer’s risk is spread across a group of policyholders.
- Group plans cannot be purchased by individuals, and usually require at least 70% participation in the plan to be valid.
- Premiums are split between the organization and its members, and coverage may be extended to members' families and/or other dependents for an extra cost.
- Employers can receive favorable tax benefits for offering group health insurance to their employees.
In this blog post, we’ll highlight the benefits of purchasing group health insurance for both your business and your employees.
Benefits of Group Health Insurance for Your Employees
Having access to employer-sponsored medical insurance is incredibly important in this country. Consider the following statistics from the CDC on the economic cost of some of the most common chronic conditions:
- The economic cost of heart disease and stroke is estimated to be $214 billion per year and causes $138 billion in lost productivity on the job.
- The total cost of cancer care was projected to be $174 billion in 2020.
- In 2017, the total estimated cost of diagnosed diabetes was $327 billion in medical costs and lost productivity.
- Obesity costs the U.S. healthcare system $147 billion a year.
The aggregate view is staggering, but it’s important to keep in mind what these costs mean for individuals and families. If a woman is diagnosed with breast cancer, the initial cost of treatment would be over $23,000, plus thousands more for continuing care.
Facing such daunting medical bills without insurance is a scary thought. Extending medical coverage to your employees and their families helps ensure they will be in a position to obtain medical care when needed. Having affordable health insurance also encourages employees to actively participate in maintaining their health and improves their ability to access services that may otherwise be priced out of their reach.
Many group health insurance plans also offer voluntary or supplemental insurance plans, which may include dental, vision, and prescription coverage. These can usually be purchased individually or as a package.
Benefits of Group Health Insurance for Your Business
There are many major advantages to purchasing group medical coverage for your business. Having this type of coverage may help you:
Lower Your Hiring Costs
Recruiting, hiring, and training a new employee takes a lot of time, effort, and resources. In today’s competitive job market, being able to offer a favorable health benefits plan will help you recruit top talent faster, which in turn lowers your cost to hire.
Reduce Absenteeism
According to WellSteps, various academic papers have demonstrated that employees with the following attributes have lower rates of absenteeism at work:
- Live a healthy lifestyle
- Healthy blood pressure, cholesterol, and glucose levels
- Don’t smoke
- Are not overweight
Having access to quality health benefits will help your employees stay healthy. In turn, this will help increase the productivity of your workforce.
Tax Benefits for Your Business
According to HealthCoverageGuide, “Generally speaking, any expenses an employer incurs related to health insurance (for employees or for dependents) are 100% tax-deductible as ordinary business expenses, on both state and federal income taxes.
It is [also] possible to set things up so that your employees save tax money. With just a little paperwork on your part, an employee can 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 the employee’s take-home pay and lowers the amount of the employee’s taxable income.”
Did you know that 20% of organizations recently indicated that their health-related benefits have increased in the past twelve months, despite the estimated cost of employer-sponsored healthcare benefits approaching $15,000 per employee in 2021?
The health benefits industry is continuously evolving and the cost for the best employee benefits plans continues to increase. As a business leader, offering your employees comprehensive healthcare insurance, benefits, and wellness programs allows you to remain competitive in the market.
Utilizing our core carriers with over 150+ plan offerings, our team of benefits brokers can provide your company—whether you are a small business or large corporation—comprehensive solutions.
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