Health insurance is important for protecting an individual or family from financial loss because of costs incurred due to sickness or injury. A U.S. Census Bureau estimates 85% of Americans have some form of health insurance. Roughly half of these people get their insurance through their employer or their spouse’s employer.
There are a number of good reasons why offering insurance benefits to employees if a smart business move:
Businesses that chose to offer health insurance as part of their employee benefits package are able to attract more qualified applicants. This is especially important for industries who compete with other competitors in their area- offering insurance can give them a leg up.
Lower Operating Costs
Employees are generally more inclined to take a position at a lower salary if there are health insurance benefits included. This is because generally it is more expensive for someone to obtain an individual insurance policy, which makes up the difference of a lower salary. This gives the employer more room to negotiate lower salary costs, which can ultimately save the company in the long run.
Businesses that offer health insurance are able to deduct a portion of their contribution towards the employee plans and receive a tax advantage. If the business is incorporated, the owner’s insurance and coverage paid for employees are entirely deductible.
Reduced Insurance Costs
Group rates are usually better than those for individuals. The more people in a group health insurance plan, the lower costs are for everyone. Because the risk to the provider are spread across a larger group of people, the costs stay lower. Therefore, it is encouraged for a business owner to extend to employees, because everyone benefits from the lowered cost.
Enhanced Productivity and Morale
A healthy workforce is an effective workforce. Employees with health insurance are out sick fewer days, and return to work sooner. An Australia-based study found that healthy workers were three times more productive than those in poor health. In addition, staff morale is generally higher when the employees feel the sense of security that comes from knowing that their employer provides them with the benefits they need.