If you’re a small business owner, you might be wondering if you should offer your employees health care insurance, how much and what it will cost. Although the law doesn’t require small businesses to provide health coverage to employees, it may be beneficial for small companies to ensure their employees have easier access to healthcare. There are many choices for group health insurance, but the cost of coverage might be an inhibiting factor.
Benefits of Small Business Health Insurance
Small businesses may wish to forego health insurance because they want to save on costs. However, studies show that skipping employee health care coverage can be bad for business. From low employee morale to high rates of absenteeism, the risks of not offering employee health coverage can cost more than the insurance premiums.
Attract and Keep Quality Employees
One of the first things that attract a potential employee to a company is the benefits offered. Job hunters are searching for attractive benefits packages, and health care falls into that category. Even if an employee enjoys the job, if they can’t cover healthcare costs, they are more like to seek employment with companies that provide the benefits they need.
Healthy Employees Are Happy Employees
Studies show that when employee health declines, so does employee morale. When employees are healthy, attendance, productivity, and efficiency increase. When an employee lacks healthcare insurance, they may avoid visiting a doctor because they’re unable to pay for the visit leading to a higher likelihood of illness and injury. Sick and injured employees don’t show up to work.
Employees who have pre-existing health concerns or family members with health issues also tend to worry about how they’ll pay for doctor visits and possible hospitalizations and medical procedures. Worry causes them to be distracted and therefore less productive. This can lead to increased recovery time and more missed hours.
Increased Absenteeism Increases Costs
Believe it or not, your costs increase when an employee is absent. Costs accrue from lost productivity, paying overtime to employees that have to pick up the slack, and decreased morale in employees who cover for absent employees.
Small businesses benefit, in the long run, from health care insurance.
Small Business Health Options Plans
There are affordable health insurance plans for small businesses to ensure they can offer coverage to employees. Small Business Health Options Plans (SHOP) provide health care benefits to businesses with 50 or employees or less. It gives them greater flexibility to choose the best packages for their needs.
Businesses can offer employees a single plan or let them choose from multiple plans. They can select the types of coverage they need such as medical-only, dental-only, or both. SHOP plans also allow employers to decide how much of their employees’ premiums they wish to pay and whether they want to cover employees’ dependents.
And finally, employers can determine their own grace period before employees may enroll in a plan.
Small Business Tax Credit
Small businesses that offer employees health insurance coverage can benefit from tax incentives. If your business has less than 25 full-time employees with an average yearly salary of $54,000, and the business pays half of the insurance premiums you’re likely to qualify for a small business health insurance tax credit.
In the end, employers who offer health insurance benefits to employees benefit far greater than saving on the cost of premiums. They attract better employees, which improves morale and productivity. They also compete better against competitors who don’t offer insurance as job seekers are more likely to apply with them.
Employee health coverage isn’t as pricey as it sounds. With SHOP employers can find health plans that suit the needs of their employees while benefiting from tax credits. Small business owners can determine what they want to offer, their share of insurance premium costs and when employees can enroll in a plan.