Nobody can predict when an injury or illness will occur, and the last thing you want to worry about when you or a family member is experiencing a medical issue is money. Health insurance gives you peace of mind by protecting you from unexpected, high medical costs so that you can focus on what’s important, getting healthy. Most health insurance plans also cover preventative care such as annual check-ups, vaccines, and screenings, which promotes long-term health and early detection and intervention for health issues.
How much does health insurance cost? According to the Kaiser Family Foundation, the average annual health insurance premium was $22,463 for a family and $7,911 for an individual in 2022.
Some organizations and businesses offer company sponsored health insurance plans in which they pay a percentage of participating workers’ monthly premiums, saving them thousands of dollars. Workers who are covered by company sponsored health insurance only pay an average of 17% of their premiums for individual coverage and 28% for family coverage.
Sounds like a lot of money coming out of the company’s pocket, right? What’s in it for the employer? In this article we will list the top 5 reasons companies should offer employee health insurance to show you that it’s truly a mutually beneficial system.
Are Employers Required to Offer Health Insurance?
Before we dive into the benefits of offering employee health insurance, let’s discuss the legal requirements that employers must follow. Organizations and businesses with 50 or more employees are required to offer health insurance coverage to 95% of their employees and their dependents. If they fail to do so, they are subject to fines that typically exceed the price of providing employees with health insurance. Employee-sponsored health coverage must meet the Affordable Care Act standards for minimum coverage and affordability standards.
Small businesses (less than 50 employees) are not required to offer health insurance, however many choose to do so. The federal Small Business Health Options Program (SHOP) helps small businesses provide employee health insurance by offering a tax credit to cover a portion of the employer’s contributions to employee premium costs.
It’s important to mention that simply providing the bare minimum that is legally required is probably not enough for a company to reap the benefits we are about to discuss. To experience these advantages, employers must offer quality health insurance plans that meet or exceed the standards of potential and current employees in terms of affordability and coverage.
1) It Shows that Your Company Values Its Employees
Corporate culture refers to the shared beliefs, expectations, and behaviors of an organization. This framework impacts everything from hiring decisions and productivity, to interactions between management and employees. A key aspect of creating a positive company culture is ensuring that employees feel valued. When an employee feels valued, they are more invested in the success of the company because they know their role is important and their work is appreciated.
We’ve all heard the jokes about businesses throwing pizza parties and giving out frivolous gifts instead of giving their employees anything of real value. This damages company culture. Offering employee benefits, including health insurance, shows that a business genuinely values its employees from day 1. It signifies that employee wellbeing is a priority and a core value of the organization.
2) Health Insurance Impacts Recruiting
Health insurance is a major expense. In addition to comparing wages and salaries, smart job candidates evaluate the value of benefits, such as health insurance, when choosing which jobs to pursue. Company-sponsored health insurance (and other benefits) can often leave an individual with more money at the end of the month and in better financial standing compared to a higher paying job that lacks quality benefits.
Studies confirm that health insurance is a powerful variable in the job selection process. In fact, 46% of American adults report that health insurance was either the deciding factor or a positive influence in choosing their current job. For highly sought after individuals or job candidates deciding between two similar jobs, quality health insurance is a valuable bargaining chip that recruiters can use to tip the scales in their company’s favor.
Attract Experienced Candidates
Job experience is an invaluable asset across industries. The ability to attract more mature job candidates with years or even decades of experience to fill high-ranking positions and guide younger generations can be extremely beneficial for a business or organization. Employers must consider that older individuals may have different expectations or put more weight on employee healthcare plans.
The cost of health insurance increases with age–the average premium gradually rises until age 50, then takes a steep uptick. The average monthly premium for a 30-year-old is $227, by 55 this number nearly doubles to $446. Additionally, older individuals are more likely to require medical care, so they may be more concerned about the level of coverage and specific types of coverage available. Offering exceptional health insurance can help a business lock down these experienced candidates.
3) Employee Health Insurance Reduces Turnover Rate
Offering quality employee health care doesn’t only attract the best job candidates, it helps employers hold on to them. 50.5 million Americans quit their jobs in 2022. This trend, known as The Great Resignation, began during the pandemic and has shown no sign of slowing down. In a job market where employees do not hesitate to quit their current jobs in pursuit of something better, retaining employees is an utmost concern for many businesses. Companies are offering higher salaries and better benefits in efforts to keep their employees satisfied. Statistics show that employee health insurance has a major impact on turnover rates. In fact, 56% of U.S. adults with employer-sponsored health benefits report that whether or not they like their health coverage is a key factor in deciding to stay at their current job.
4) Improved Attendance
Everyone needs a sick day every now and then, but good employee health insurance can reduce the number of days that employees need to take off due to illness or other medical issues. You might be thinking, how? First off, individuals with insurance are more likely to seek medical attention for common illnesses.
As an example, let’s discuss one of the most common illnesses that keeps us home from work, strep throat. With a quick trip to the doctor and an antibiotic prescription, strep throat symptoms subside in 1-2 days and the individual is not contagious after 24 hours. Without health insurance, the price of the doctor’s appointment and prescription may deter an individual from seeking treatment. Without antibiotics, strep throat symptoms typically last 7-10 days and the infection is contagious for up to three weeks.
Health insurance typically pays for preventative care as well, so insured individuals are more likely to get regular checkups and screenings. Identifying health issues early can make a significant impact in the severity and outcome of diseases and health conditions.
5) Increased Productivity
Quality company-sponsored health insurance contributes to a positive culture within a company, reduces absences, and helps attract and retain top talent. These factors are all directly linked to increased productivity.
Workplace Health Programs
For some businesses, health insurance is just one aspect of a workplace wellness program. Every program is unique, but some popular components include health and nutrition education classes, fitness facilities, tobacco-free campuses, and access to healthy foods in the workplace. In tandem with preventative medical care covered by insurance, these programs promote long-term health and healthy habits including regular exercise, a healthy sleep schedule, and a nutritious diet. This is beneficial to employers because health is directly linked with focus and productivity. According to a survey conducted by the International Foundation of Employee Benefit Plans that measured the impact of corporate wellness programs, 66% reported increased productivity. Additionally, 67% of employers reported an increase in employee satisfaction.
Utilize an Independent Insurance Agency to Find the Right Employee Insurance Plan
There are a lot of options and variables to consider when it comes to employee health insurance. Whether a business is looking to add employee health insurance to their benefits package, find more affordable coverage, change or improve their current offerings, an independent insurance agency is the best resource. Independent agents evaluate the needs of their clients, provide them with coverage options, and compare carriers to achieve their mission of connecting their clients with the right coverage for the right price.
Fortified is an alliance of top independent insurance agencies that came together to provide this valuable service at a higher level. In the insurance world there is strength in numbers, Fortified was formed to provide member agencies with greater access to carrier options and lines so they can in turn provide better coverage options to their clients. The members of Fortified have bolstered status in the insurance marketplace without sacrificing their independence and the qualities that make independent insurance agencies great—personal connections, long-term relationships, tradition and history, and individuality.