Small businesses in California enjoy a number of advantages over large corporations. They are nimbler, more dynamic and can deliver a more personalized service. However, they also face a number of disadvantages primarily arising from their lack of scale. Decisions that wouldn’t have a massive impact on larger organizations can make or break a small business.
One of these is the question of health insurance. Whereas small businesses aren’t obligated to provide group health insurance plans for their employees, a significant number do. Here’s a look at some of the main reasons for taking up a group plan.
1. It’s Not Complicated
Make no mistake: you have to go through quite a bit of paperwork to conclude a group plan. Large businesses have the advantage of dedicated in-house legal departments with the time and resources required to comb through the detailed terms and conditions. Still, getting a group policy is easier than you think.
While many small businesses will have a lawyer on retainer, they can also benefit from the advice of California health insurance brokers. Brokers can guide you through the process including selecting the right plan for your team based on industry trends and relevant regulations. They can also provide answers to difficult questions on matters health insurance your employees may have.
2. It Pleases Employees
In most workplace surveys done over the years, employees consistently rank health insurance as the single most important benefit they can receive from an employer well ahead of vacations and pension plans.
This is not surprising of course given that medical expenses are one of the most common causes of individual bankruptcy. In order to adequately compete for the best talent with larger corporations, small businesses should offer health insurance as the first employee benefit before adding other perks.
3. Saves You Taxes
There are tax benefits when you take up a group health insurance plan. Actually, employees and employers pay less for insurance when they go for a group policy.
When an employee purchases health insurance individually, they’ll use their post-tax income to buy it. In other words, once they’ve earned their money and the government has taken taxes from that income, it’s from the remaining amount that they’ll buy insurance.
However, when they are incorporated into a group plan, they pay using their pre-tax income. This can lead to savings of as much as 45 percent. Benefits for employers are even greater. Paying for employee health benefits as opposed to higher salaries means employers don’t pay workers compensation premiums and payroll taxes.
4. Wider Array of Hospitals and Doctors
Group insurance plans characteristically have a broader array of options than individual plans. This is especially so when it comes to access to healthcare providers. Group plans encompass a greater number of doctors and hospitals.
In fact, doctors and hospitals that do not accept individual plans are often more sought after because they have more time and resources to focus on each patient. Policy networks may vary from state to state. In California, individual health insurance networks are usually two-thirds the size of group policies.
5. Boosts Productivity
The reason businesses started to seek out health insurance for their employees in the first place was because of the impact on operations that an incapacitated employee would have. It’s therefore not surprising that the majority of employers see improved productivity as one of the key benefits of a group health insurance plan.
In addition, a study by the CDC showed that employers who invested in preventive care such as regular checkups had more accomplished employees at the workplace. Considering the relatively small number of employees that small businesses have, it is in every small business owner’s interest to do everything possible to keep employees at work and at optimal productivity.
Medical problems can be draining and distracting taking a huge toll on an employee’s time and energy. A group plan not only mitigates against this risk but also takes away the headache of each member of staff setting up a health insurance policy on their own.
From having a happier, healthier team to saving a significant amount of money, these are just some of the most obvious reasons for taking the plunge and offering a group health insurance plan to employees. Health insurance benefits signal to the team that you are cognizant of their needs and are willing to go the extra mile to make sure they live a comfortable life.
