If this article had a moral, it would be that giving your employees health insurance
coverage is the right thing to do and, ultimately, beneficial for all concerned parties.
It鈥檚 kind of like A Christmas Carol in that Ebenezer Scrooge opening his heart was a good thing for him that ultimately
saved Tiny Tim. There鈥檚 no moral here, though, just 5 reasons you should offer health insurance for employees.
5. It鈥檚 Pricey, But Maybe Not as Pricey as You Think
Yes, health insurance is pricey. According to the (KFF), the average cost of employer-provided health insurance in 2019 was $7,188 for an individual and $20,576 for a family.
Here are some more KFF numbers from 2019 to crunch:
- Among workers with employee-sponsored coverage, the annual share of the tab for premiums on individual coverage was 18 percent, with the percentage climbing to 30 percent for family coverage.
- Coverage percentages vary by company size. Forty-seven percent of companies with three to nine workers offered some degree of coverage. Most companies with 1,000 or more workers offered some form of coverage.
- Overall, 57 percent of companies provided some level of health benefits to employees.
- Fifty-five percent of workers are in employer-sponsored health plans.
- Ninety percent of people work for large companies, and most of those companies offer some level of health care coverage.
If you鈥檙e trying to make those percentages add up, remember that a lot of workers
are on government insurance plans, and many others simply reject the expense of coverage.
贬别谤别鈥檚 Why It鈥檚 Not as Pricey as You Might Think
With premiums topping $7,000 for individuals and $20,000 for families, where are the savings?
For the insured, there are savings on taxes. The premium costs are deducted before . On average, that means thousands of tax-free dollars. A discussion on how much the coverage can save on medical expenses would be purely speculative. That speculation could include medical bills topping tens or even hundreds of thousands of dollars.
For the participating employer, there are monetary considerations, too. According to , companies providing coverage for employees:
- Avoid penalties levied under the Patient Protection and Affordable Care Act over failure to offer coverage to employees.
- Bolster compensation packages and get a tax credit for the outlay. If the business is incorporated, the cost of your insurance as well as your employees鈥� is deductible.
- Can get a tax credit if they have fewer than 25 employees.
- Can qualify for an additional tax credit if a wellness program is offered, too.
- Can find lower rates by leveraging the purchasing power of a group.
- Can cut annual costs of sick leave, health plans, workers鈥� compensation, and disability insurance by roughly 25 percent, according to the
For employers offering insurance coverage, there also are savings accrued through
improvements in employee recruitment and retention and increased productivity.
4. Recruiting Top Talent Gets a Little Easier
Supplementing employee compensation is a 20th century idea that gained a lot of ground when wage and price controls were instituted during World War II. Wages were frozen, but the freeze did not apply to fringe benefits. . Two other things happened that made that coverage a workplace fixture:
- In the late 1940s, the National Labor Relations Board made employee benefit plans subject to collective bargaining.
- In 1954, the IRS exempted employer-paid health insurance premiums from income tax.
, in an article on recruitment, equates the value of health care coverage to hiring
in a way that doesn鈥檛 require a calculator to interpret: 鈥淭o put it plainly, if you
do not offer employee health benefits, or only offer subpar options, you will miss
out on great candidates.鈥�
3. Health Care Coverage as an Employee Retention Tool
In a 2018 article, notes that 55 percent of employees said health insurance is paramount in terms of job satisfaction.
, an insurer, agrees that good coverage is a top-shelf retention tool: 鈥淓mployees are more likely to stay with a company that offers valuable insurance benefits, as they (benefits) can be far more costly to replace on an individual basis.鈥�
Turns out that health insurance is a form of appreciation employees favor, one that
can help curb employee turnover and keep your top employees from roaming.
2. Offering Health Care Coverage Can Increase Productivity
offers these insights on the effects of health care offerings on productivity:
- Health-related absences incur lost productivity costs that exceed the worker鈥檚 wage by 28 percent.
- Working at suboptimal levels 鈥渁ccounts for between 20 percent and 60 percent of the total health-related costs faced by employers that can be traced to on-the-job productivity losses.鈥�
贬别谤别鈥檚 take on health insurance and productivity: 鈥淎 healthy workforce is a more productive workforce. It鈥檚 plain and simple. Employees with health insurance are out sick from work fewer days, and continue working. An Australia-based study found that healthy workers were three times more productive than those in poor health.鈥�
Offer health care coverage with a wellness program and the benefits increase, says.
- Wellness plans that address anxiety issues can take on work-related stress, a top job-related health problem.
- Wellness efforts can curb four of the nation鈥檚 most costly (for employers) health conditions, chest pain (angina), high blood pressure, diabetes, and heart attacks.
The notes that worker participation in a health promotion program yielded the equivalent
of 10.3 hours of additional productivity per employee annually and saved employers
an average of $353 per person in productivity costs.
1. It鈥檚 Easier than You Think, and You Can Get Covered, Too
Want to get rolling on health insurance for the employees of your small business? is a clearinghouse for information and a starting point to shop coverage.
Thinking bigger? Shop around for an insurance broker or agent. They can:
- Tailor a plan to your business and employees鈥� needs.
- Shepherd workers through the startup phase, and field questions and offer advice thereafter.
- Keep you plugged in and on track when it comes to regulations.
Turning to the experts always is a good idea. When it comes to professional training, from human resources to project management, the place to turn is the USF division aptly named the Office of Professional Training and Corporate Education.
Explore our programs online, or contact us to discuss what we can do for you and your team.