According to a Congressional Research Service report, the private group health insurance market covered approximately 54.7% of the population in 2021, predominantly constituting employer-sponsored health insurance. Since paying the premiums is an extra cost to employers and employees, why would they sign up for group health insurance, considering it’s optional in some instances? This article examines the benefits of group health insurance for businesses.
1. Saves Money
One of the key benefits of group health insurance for businesses is that it could lead to cost savings. This is especially helpful for those who can’t afford to take out an individual health cover.
Because you pool several employees under the group insurance plan, this increases the risk pool since more people buy the plan and share the total fee among themselves, lowering the cost of the insurance coverage.
Applying as a group also entitles the employer to a broader variety of health plans and places to find even better deals, such as the Small Business Health Options Program (SHOP) marketplace.
2. Tax Incentives
This type of health plan offers tax benefits to the employer and workers. Employee contributions are made pre-tax, lowering their taxable income, and employer contributions are tax-deductible.
Smaller companies with less than 25 full-time workers who receive an average wage of less than $50,000 yearly, may qualify for more tax benefits under the Small Business Health Care Tax Credit.
3. Group Health Insurance for Businesses Enhances Worker Productivity
Providing the right group health plan leads to a happier workforce as they feel valued, an excellent motivator for workers that might lead to improved productivity.
Having group health coverage means workers receive regular checkups, screenings, and prompt medical care. In the long run, workers will be healthier, reducing absenteeism and improving productivity.
4. Attract and Retain Talent
Similarly, a happy workforce creates a positive work environment, which can attract and retain talented workers. Offering health insurance shows you care about employee health.
Moreover, a survey found that 71% of prospective workers said whether a company offers health insurance is a vital factor in their decision to accept a job offer.
In another survey, 56% of respondents said an employer providing health coverage was a key determinant in their decision to remain at their current job.
5. Covers Family Members
Some group insurance plans will also include cover for employees’ family members at an additional cost cheaper than if they got it separately.
While it may seem like an afterthought, the extra coverage for families is not barebones. Most plans often include maternity, medicines, and daycare coverage, although this varies from provider to provider.
This minimizes the hustle of managing individual plans for the entire family.
6. Value-added Benefits
Most health insurance covers provide supplemental benefits that may seem unrelated to the core cover.
These may include gym membership, health and wellness sessions, or pharmacy, vision, or dental plans, which they can offer at a discounted rate or as a bundle in the package as a value-added benefit.
7. No Waiting Period to Cover Pre-Existing Diseases
Most individual health insurance plans will require the insured to wait for a certain period before they can compensate them for pre-existing diseases. A group insurance cover does not have such restraints.
A group plan provides more extensive coverage than individual health plans because its members can file claims for pre-existing conditions the instant their employer signs the dotted line on the insurance contract.
Providing group health insurance has several benefits to workers and employers. For instance, workers can have their families included in the plan, both workers and employers will enjoy tax benefits, and employers will realize enhanced productivity from a healthier workforce.