Business health insurance is a sure way to ensure the welfare of your employees and improve their productivity. Nevertheless, there is no law requiring companies to provide health insurance for their workers. Therefore, small business owners often question the economic rationale of offering health insurance. So, is business health insurance worthwhile?
Business Health Insurance
Business health insurance is an insurance product designed to provide quality medical care for a business owner and employees. Essentially, business health insurance offers financial support to cater for medical bills in case of employees' illness or injuries.
Business owners have two main options when purchasing health insurance. To begin with, the proprietors can opt for a Qualified Small Employer Health Care Reimbursement Account (QSEHRA). The QSEHRA is ideal for businesses of up to 49 workers. In practice, the business owner sets allowance for QSEHRA to cater for a basic medical cover. Employees who incur medical expenses can claim reimbursement.
Group health insurance is a popular policy cover for businesses with at least 50 employees. The striking feature for a group health insurance is offering coverage at a comparatively lower cost. The discounted insurance premiums result from the ability to spread the risk among group members.
A group health insurance cover includes the following features:
- The policy cover is only open to groups
- At least 70% of the employees must participate in the cover
- The group cover is not compulsory for the staff
- A company pays at least 50% of the contribution, and the rest is shared among the employees
- Employees can add family members and dependents at extra premiums
Benefits of Business Health Insurance
Business health insurance provides access to low insurance premiums. From a practical perspective, the group health insurance provides a stable pool of resources to cover individual members on a case basis. Hence, it is cheaper to get a medical cover through group health insurance than a personal cover. This affordability extends to employee's families.
Business health insurance helps employers to reduce their tax burden. Ideally, the cost incurred in health insurance contributions qualifies for 100% tax deductions. Additionally, the small business health care tax credit may support qualifying employers to offer medical insurance to their workers.
Human Resource Benefits
Business health insurance helps to attract, retain, and motivate employees. For starters, employers usually include health insurance as a benefit in the job description during recruitment. Then, the employer's contribution to workers' insurance works as a strategy to gain staff loyalty. Lastly, offering health insurance can help increase job satisfaction, given that the medical cover extends to family members. Thus, business health insurance works as a human resource strategy to attract and retain quality talent.
The benefits of business health insurance outstrip the cost of the policy cover. Employers can increase business productivity and competitiveness while reducing turnover by providing health insurance.
For more information, contact a business health insurance provider.