Posted by United Insurance & Financial Group, LLC on
Health insurance always seems to be a hot topic in the U.S. and if you own a small business, you may be wondering if you should offer health insurance for your employees; and if so, what are the pros and cons? The simple answer is if you employ 50 or more full-time employees, you are required to offer affordable health benefits that meet minimum essential coverage under the Affordable Care Act. However, smaller businesses are not required to do the same. In this article we will explore the advantages of offering health insurance for employees in your small business.
Benefits of Offering Health Insurance for Small Businesses
Attracting top talent and retaining them year after year. The job market is hot right now and largely due to the Covid-19 pandemic; job applicants are inquiring more and more about what an employer can offer them as a future employee. A huge benefit to a potential employee is good health insurance for them and their families. Businesses that choose to not offer any health benefits risk the possibility of an employee leaving to find a better job offer that gives them the means to provide for their family. If you want to attract the best employees, you want to lure them in with good health insurance.
Helping your business stand out against the competition. If an applicant is in between working for you and a competitor and the competitor offers good health care benefits, there’s a good chance you will lose out on hiring that person. In 2020, the average family in the U.S. paid over $1,000 per person every month for health insurance. And the average deductible was $8,439 for families, meaning they had to spend $8,439 out of pocket before many of their paid for benefits even kicked in.
Building a healthier workforce. At the end of the day, it makes sense to offer health benefits to employees to ensure they are taken care of in mind, body, and spirit. When people have access to resources to help them stay healthy, they are more likely to be happy at work and do their jobs well, which ultimately benefits the business.
Saving more money during tax season. When you offer health insurance to employees, you save more during tax season. If you pay for at least half of your employees’ premium health insurance costs (excluding premiums for dependents), you can write those costs off as a business expense.
Small Group Health Insurance
Small businesses can also offer small group health insurance if they employ less than 50 workers. Small group health insurance is medical coverage smaller business can offer. In order to qualify, you have to employ at least 2 people, but no more than 50 (this can vary state by state, however). Most insurance companies that offer small group health insurance usually require 75% of employees to be enrolled in the policy. These small group plans are compliant with the Affordable Care Act’s requirement of Health Coverage, meaning they offer coverage for the following areas:
Maternity and newborn care
Services for mental health disorders and substance abuse services
Pediatric services for children, including dental and vision care
*note that small group health insurance won’t include any coverage for adult dental and vision
Unlike normal insurance plans, there is no open enrollment period for small group health insurance, meaning you can enroll in a plan at any time. Prices for small group health insurance will vary state by state and will be dependent on how big of a percentage the employer is willing to pay toward premiums, however there are minimums to how much they must cover.
Another health insurance option for your small business is QSEHRA which is a health reimbursement arrangement where employees receive an allowance on qualifying medical expenses including insurance premiums.
According to the Society for Human Resource Management, health insurance consistency ranks the topmost requested employee benefit, so it’s important to strongly consider offering it to employees. To learn more about options available to you as a small business, reach out to United Financial by calling (484) 881–6848 or by leaving an inquiry here.