What are the Small Group Benefits When it Come to Insurance Coverage?


The Benefits in Small Group Health Insurance Coverage?

According to the U.S. census in 2012, the 28 million small businesses in the United States generates employments to as many as 52.6 million American people. In spite of the fact that small business employers aren’t obliged by law to provide insurance coverage plan to their employees, they are still being encouraged to provide these benefits due to some aspects that contribute and affects significantly to their business success. Most of the employers provide these benefits for employee’s retention and also to attract new talents that would be great assets to the company.

The Differences between Traditional Plan and Managed Care                

Every group health insurance has its own set of small group benefits and vary depending on some factors whether it is a traditional type of plan or a managed care plan. Most of the time, a traditional plan comes with a higher premium rate since it has a wide range of doctors and hospitals while the managed care plan would cost less than the other type of plan since it a bit limited options when it comes to choosing doctors and hospitals.

Major health insurance providers offer both types of plans and government in most states require that business owner covers at least 50% of the premium cost. Without proper knowledge, many employers think that they are required to pay the whole premium cost which causing them not to provide this essential employee’s benefits. However, most of employers still know that when they are not providing the adequate health insurance coverage to their employees, it affects their relationship with them in a disadvantageous way.  Statistics shows that 75% of small business employers admit that their business suffer due to not offering small group health insurance coverage to their employees.

Reasons for Providing Health Insurance Coverage

Based on what has discussed above, we can say that providing employees with the health insurance coverage is not that expensive as what most employers think and not offering this essential benefit to their employees affects the business operation negatively. That being said, let’s check some reasons why a small businesses  should consider providing health insurance coverage to its employees even it is not required by the law.

Good Employees Retention and Recruiting New Talents

As what we know, group health insurance coverage is one of the good benefits that attracts new talents and a great reason to stay in a company especially to small companies. In small business, new employees may be tempted to move a larger company or to a big corporation that may offer better benefits than what they are getting from their current employer. However, considering some other factors and having a great group insurance coverage including health insurance from the employer, great employees have more than enough reasons to stay in the company and won’t even think or consider to join to other bigger company. This will also attracts great new talents in the future.

Tax Benefits

Offering group health insurance coverage to employees results tax benefits both to employers and employees. Most of the time, all the expenses incurred for providing the insurance coverage would be 100% tax-deductible for the business. In addition, with legal paper works, employees’ contribution can be made on a pre-tax basis as well. The employer will be allowed to make employees’ contribution before paying them to avoid from dealing with any tax liabilities related to their contribution which is giving a higher net pay to employees.San Jose Museum of Art

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