As a small business, you struggle to compete with the benefits packages big corporations offer. You need a group health insurance plan to entice the best employees to hire and stay with your company.
Almost 50% of businesses that employ 3-9 workers offer health insurance. This jumps to 71% when the business has 10-24 employees and to 85% when they have 25-49 employees. At 200 or more employees 99% of small businesses offer health insurance to employees.
Providing a small group health insurance plan makes you more competitive when hiring, but that isn’t the only benefit. Keep reading to learn five reasons why your company needs small group insurance.
1. Savings for the Business Owner
By providing group insurance to your employees, you may have lower payments per person than if purchasing individual coverage for yourself. As an added benefit, the premiums you pay for your employee’s health insurance are usually 100% tax-deductible as a business expense.
This is because group health insurance plans have a larger risk pool, lowering the per-person cost. By paying for coverage in a group, the average cost stabilizes. If one person becomes ill, it has less impact on the other members.
In addition to out-of-pocket financial benefits, you will have healthier, more productive employees. People with good health care take fewer sick days. This allows them to be more productive on the job.
Small Business Health Care Tax Credit
The small business health care tax credit is a creation of the Affordable Care Act. The credit encourages small businesses to offer group health insurance to employees. To qualify for the credit the business must:
- Have less than 25 full-time employees, less than 10 employees renders the full benefit
- Pay an average wage of less than $50,000 annually per employee
- Pay at least 50% of the qualified employee’s health insurance premiums
- Purchase insurance through a licensed health insurance agent who can enroll the business in a Small Business Health Options Program (SHOP) plan
The tax credit is only available for two consecutive years and isn’t easy to qualify for. Some businesses may not consider it worth applying.
2. Pre-Tax Benefit
By offering group health insurance to your employees the monthly premiums will be lower. Their portion is paid by deducting it from their pre-tax salary.
Because their premium payment lowers the taxable income on their paycheck, you are reducing their taxable income. As a result, the money that would have gone to the government instead goes to paying their health insurance.
3. Team Spirit
By placing all of your employees under one health insurance plan they will feel like a team. A group plan is the best insurance for small companies because it saves both the business owner and employees money.
When employees feel the company they work for has an interest in maintaining their health, it raises company morale. Health insurance plans and options are complicated. Group insurance removes the confusion and makes life easier for everyone.
4. Hire the Best
Many graduates and seasoned professionals prefer the small company atmosphere over large corporations. The reason corporations win out is their benefit package offerings. By offering a small group health insurance plan you entice more top-notch employees.
The employees know that you prioritize the health of your employees. Providing them with health insurance shows you value them as assets to your company.
The people you hire do not have to worry about researching and purchasing individual health insurance plans. The employee enrolls when they hire and know that their health insurance coverage is being handled by their employer.
5. Reduce Turnover
In 2020 in the United States experienced an average employee turnover of 57.3%. That percentage of the workforce was either leaving their job or starting a new one.
When an employee gives notice the ability to retain usually depends on increasing their pay, flexibility, or benefits. By offering better benefits such as health care 19% of employees will remain at their current job.
While retention may seem minor, you must consider the cost to the business. Every employee rollover means time interviewing and training someone new. A well-trained, happy employee keeps your business running smoothly.
Get Group Health Insurance Today
FutureWise Insurance can help move your small business into the big leagues by offering group health insurance to all employees. We offer plans to fit your needs in health, dental, vision, and life group insurance.
Call us today at (210) 469-3900 or use our online email form with any questions or to request a quote.