Group health insurance is usually provided by an employer and can cover just the employee or even the employee’s spouse and children.
Not providing group health coverage could be a major misstep for some companies regardless of size, as there are a number of benefits to providing Group Health Insurance coverage.
1. Lower Costs Than Individual Plans
There is no question that the term health care reform has been a hot-button topic and on the lips of nearly every politician regardless of political party over the course of the past 10 years. In light of the Affordable Care Act, it has now become more affordable to purchase Group Health Insurance than for your employees to purchase health insurance individually.
Level-funding insurance plan options have been growing in popularity over the past number years. Level-funded plans are ERISA compliant and may offer more flexibility for employers with virtually no risk and offered by several reputable insurance carriers with a nationwide network of hospitals and physicians to choose from.
What has many employers especially excited about these plans is the opportunity for 10%-15% in lower premium costs and the Return of Premium potential. Unlike other policies on the market, with level-funded options, if your employees don’t rack up a large number of claims throughout the year, your company may have a substantial amount of money (originally paid in premiums) returned.
2. Attraction and Retention
If looking at the cost of a group health insurance plan leaves you feeling queasy and the idea of paying the tax penalty sounds more appeal, you may want to think twice.
As job seekers now expect for their employers to at least partially cover their healthcare needs through group health insurance policies, walking into a job interview and being told that the company refuses to pay health care for full-time workers is a red flag. Even if a potential employee is in trouble financially, they may still take the job out of desperation but will jump ship as soon as they can afford to for greener pastures.
Providing Group Health Insurance for your employees shows a certain level of care and respect that new and existing employees will appreciate and keep in mind going further within your company.
3. Tax Benefits of Providing Group Health Insurance
In some cases, it’s possible that providing your employees with Group Health Insurance could give you a welcome tax write-off, not to mention added tax benefits for your employees.
Payments made to group health insurance premiums, reimbursement plans (HRAs), and Health Savings Accounts (HSAs) are generally all eligible for tax advantages as all of these payments can be made as pre-tax contributions.
As an added bonus, qualifying health insurance plans may also be eligible for HSAs for their employees. HSA’s are 100 percent owned by the individual employee and not tied to you in any way. In a 2015 study conducted by Devenir compiled data from the top twenty HSA providers in the U.S. and found a 1775% increase in assets between 2006 and 2015, showing that now more than ever, people are choosing to invest their money in HSA’s rather than insurance plans with more coverage.
Member Benefits has been in the insurance brokerage business for over 30 years and is the recommended broker of AAOS. To see the insurance benefits we provide to AAOS, visit www.aaos.memberbenefits.com.