Medical insurance – are there two more dreaded words that can be spoken to a small business owner? Small business medical insurance, however, offers numerous benefits and tax advantages that make it well worth the cost of premiums.
Health insurance for employees of small businesses is a hot button issue. Approximately 45 million U.S. residents do not have health insurance. Of those, about 20 million are employees, or a family member of an employee, of a business that has 50 or fewer employees. For companies that have more than 50 employees, more than 96% of workers have health insurance. That number is only about 43% for small businesses.
What accounts for this phenomenon? You hear over and over again that employee health insurance is one of the biggest expenses that a business owner faces. What exactly, though, are those expenses? The business owner is required to pay a percentage of the employee’s individual premium. Typically this percentage ranges between 25% and 50%. If coverage is extended to the employee’s family members, the employer cannot elect, but is not required, to also pay a percentage of those premiums.
In addition, small businesses typically must pay larger premiums than businesses with more than 50 employees. State requirements that certain conditions, treatments and providers be covered by the group health insurance policy is another reason that small business medical insurance can be costly.
Small business medical insurance applies to businesses that employ between 2 to 50 people. Any permanent, compensated employee that works at least 25 hours per week is typically eligible to enroll in a small business health plan.
Despite the costs, small business healthcare insurance has very real benefits. When you’re able to offer health insurance to job applicants, you are guaranteed to have a more talented pool of candidates to choose from. As we’re reminded of daily in the news, quality medical insurance is a major concern for Americans.
Retention is another benefit of small business medical insurance. It costs you less to retain an employee than to seek out and train a new employee. If your employees are getting medical insurance from you, they won’t jump ship to take a job with another employer simply to obtain medical insurance.
Last but absolutely not least, a healthy employee is a more productive employee. Having healthy employees, like the retention issue mentioned above, saves you money. When an employee is out on a paid sick day, you’re shelling out the cash without getting any of the work. So although you’re paying part of your employees’ premiums, you’re saving money in other areas by offering medical insurance.
Need more convincing? Group health insurance has tax advantages for business owners. Typically employer contributions to small business healthcare insurance plans are 100% tax deductible.
Small business health insurance benefits you and all of your employees in yet another way. Health insurance, as you undoubtedly know, can be very expensive. With a group health insurance plan, you are spreading the risk amongst all of the employees. That means lower premiums and better coverage.
The arguments in favor of small business health benefits are persuasive. Finding affordable medical insurance for employees is possible. It all starts with carefully researching the group plans available to your business. Be sure that you are working with a legitimate, reputable medical insurance company, and you’ll reap a number of benefits that will ensure a strong return on your investment. And health insurance for your employees really is an investment in your business.