Why Offer Health Insurance to Employees
When considering what kinds of benefits to provide for your employees, you might wonder whether health insurance is worth it. While it may seem like a large expense, the truth is that investing in your team’s wellbeing will save you money in the long run.
Why Providing Your Employees With Insurance Helps You
Medical services, such as doctor’s appointments, surgeries or emergency care, are expensive. In some circumstances, they can cost tens of thousands of dollars. Health insurance helps to offset those costs by paying for services through a plan that covers a person when they need medical attention. The person pays a monthly premium and an agreed-upon portion of the services, and the health insurance company pays for everything else. Health insurance policies can prevent people from becoming unexpectedly responsible for massive bills.
There are two main types of health insurance: individual health insurance and group health insurance. Individual health insurance is provided directly by an insurance carrier and can be purchased by an employee when their company doesn’t offer health insurance as a benefit. These policies are also available through the national healthcare exchange.
Group health insurance is offered by an employer and makes coverage available to a large group of people. This type of insurance covers both your employees and their dependents.
Offering health insurance to your employees has many benefits for both you and your staff, including:
- Improved employee morale: Health insurance shows your employees that you’re invested in them and their wellbeing. Employees at companies that offer health insurance typically take fewer sick days because they can go to the doctor for preventative care and wellness checks. Health insurance can reduce stress and provide peace of mind for employees, helping them to feel happier and more productive at work.
- Higher employee retention: According to a 2018 survey, 78% of employees said their health insurance coverage influenced their decision to stay at their current job. Employees who have a good benefits package are less likely to leave their job, even for one with higher pay. By offering health insurance, you are increasing the likelihood that your employees will stay with your company and reducing the headache of employee turnover.
- Greater employee productivity: According to MetLife, 60% of surveyed employers said that offering health insurance increased productivity levels. Employees who aren’t worried about their health or how to afford necessary treatments are happier and less stressed than those burdened with the responsibility of handling their healthcare needs on their own.
- Competitiveness: Employees rank health insurance as their most desired benefit. By offering health insurance as part of your employment package, you’ll give yourself an edge and help attract long-term talent.
- Savings for you and your employees: When employees purchase individual health plans outside of their employment, it costs them more because it’s being purchased with post-tax dollars. But when employees purchase health insurance through their employer as part of a group health plan, they are able to use pre-tax dollars — saving them up to 45% on their health insurance premiums. Employer contributions are also tax-deductible. In addition, since your employees won’t be paying for their insurance policies completely out of their own pocket, you’ll save money by paying for those pre-tax insurance premiums rather than needing to offer higher salaries.
- Better Access: Group health insurance networks are bigger than individual networks, increasing your employees’ access to more doctors and hospitals.
How Does Group Health Insurance Work?
When purchasing group health insurance, using an insurance broker is the easiest solution. These professionals can help you create the best and most affordable plan for your employees’ needs.
Why Do Employers Offer Health Insurance?
For many workers, their job provides more than just a paycheck. They are looking for a place where they can feel valued. People spend a lot of time at work, and they want to feel like their company is as invested in their wellbeing as they are in their company’s success.
Offering health insurance, life insurance and other benefits helps a company convey how much it values employees’ time and effort. Creating a sense of security through robust benefits helps everyone feel better about the future. When employees don’t have to worry about the consequences of an unexpected diagnosis or accident, they can focus their energy on more important things in their personal and professional lives.
Employers that offer health insurance aren’t just investing in their employees; they’re also investing in their own business. A competitive benefits package will attract high-quality talent and help incentivize them to stay for a long time. Those employees will then work harder, feel happier and be less likely to leave. When your team is built from the best, you won’t have to worry about turnover or the constant headache of recruiting and hiring. You’ll be able to feel proud of the business you’ve built for yourself and your staff.