The impact of Covid 19 has raised business and employee awareness about health issues and the importance of health insurance. Finding the best small business group health insurance provider and navigating the features, benefits, and costs remain a priority for small businesses. Let’s explore the health insurance benefits that matter most to employees and the critical ways group health insurance can benefit your small business.
In 2021, the Kaiser Family Foundation (KFF) reported that 56% of small businesses with less than 50 employees offered health insurance benefits. Among the small businesses that do not provide coverage, 30% said cost was the most significant barrier, followed by a firm’s small size (25%) and employees having other health coverage available (21%).
Traditionally, the health benefits most popular with employees include health insurance, vacation pay, retirement benefits, life and disability insurance, dental plans, and vision care. 29% of small businesses paid 100% of the cost of individual employee premiums, according to KFF.
Employees in small firms have higher deductibles ($2,379) than large companies ($1,397), so the cost of your small business benefits is a key factor.
Among employers with more than 50 employees, 39% changed their mental health and substance abuse benefits partly due to the pandemic, including enabling telemedicine, KFF said. By contrast, small businesses made fewer changes to benefits for mental health and substance abuse (6%), waving or producing cost-sharing (4%) and increasing coverage for out-of-network services (3%).
While offering health benefits for businesses with fewer than 50 employees is optional, there are six compelling reasons to provide health benefits.
A well-designed, attractive group health plan can give you a competitive edge over other small businesses not offering these benefits. For example, in Utah, 60.5% of employers provided health insurance, followed by Minnesota (57.8%), Nebraska (56.8%), Wisconsin (56.5%), and California (48%). Those states with lower average employer coverage included Louisiana (41.8%), Florida (40.3%), New Mexico (36.6%) and Puerto Rico (26.6%).
In higher average states, you’ll need to compete harder, and in lower coverage states, offering benefits can make the difference between keeping and attracting top performers and struggling to recruit talent.
With the massive jump in employee resignations during Covid, retention is a priority for every business. Employees place a high value on employer-sponsored group health insurance. SHRM reported that 56% of employees said health benefits are an important factor in remaining at their current company.
Equally important, 46% said health benefits influenced or were the deciding factor in choosing their current job.
According to a JOEM research report, happy and secure employees are simply more productive. Employees who participated in a healthcare improvement program saved $353 annually or about 10.3 hours of increased productivity.
So, as an employer, why wouldn’t you want to increase productivity through better health insurance and lower absenteeism?
Why are employees most unhappy with their health insurance plans? SHRM found health care plan costs were the crucial negative for 82% of employees, followed by inadequate coverage (40%), out-of-network costs (22%), confusing plans (19%) and not enough choices (10%). A further 71% of employees expressed concern that their health insurance costs would continue to rise.
A well-designed health insurance program helps avoid the devastating impact of unexpected medical expenses or emergency care. It contributes to the financial well-being of your employees. In addition, your small business group plan may appeal to employees because it is cheaper than individual premiums for employees. Take note of those important reasons employees disliked their health insurance benefits and work with your benefits consultant to design a winning program.
There is a bottom-line reason why healthier workplaces matter to your small business. A healthy workplace means lower healthcare costs resulting in lower group insurance premiums. The utilization of medical benefits directly impacts what your business and your employees pay for health insurance.
Tax savings? The costs of providing healthcare insurance for your employees may be up to 100% deductible for your small business. According to the IRS, companies with fewer than 25 employees may be eligible for a Small Business Health Care Tax Credit.
If eligible, companies with fewer than 50 employees may also purchase coverage through the Small Business Health Options Program (SHOP). Your small business group health insurance program may cost you less and help you compete with your biggest competitors.
Taylor Benefits Insurance Agency offers many health insurance resources for small businesses. Let’s start a conversation about the best group health insurance plan to help you keep and attract talent and develop a cost-effective program. Call us at 1-800-903-6066 or reach out through our website.
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