What are the Small Group Benefits When it comes to Insurance Coverage?
Based on 2012 U.S. Census, around 28 million small businesses in the United States employ as many as 52.6 million Americans. Although it is not required by the law that employers of small businesses have to provide health insurance to their employees, they certainly see it as a big factor that needs to consider when it comes to keeping their best employees and in attracting new top talents.
Traditional Plans vs. “Managed Care”
Different factors including traditional plan or a “managed care” plan impacts the small group benefits offered by a certain group health insurance plan. Most of the time, traditional plans come with higher premiums, however it they have the wider range of access to doctors and hospitals. On the other hand, the managed care plan usually affordable to many but seemingly have limited options when it comes to choosing doctors and hospitals.
In most states, employers are required to cover at least 50% of the premium cost of any of the type of plans and these plans are sold by major health insurance providers. However, due to lack of information regarding how insurances are being paid and many employers think that they need to pay the total premium cost, they tend to be discouraged to offer this very important employee benefit. However, many of them know that not offering sufficient health insurance degrades their employees’ morale and also affects their working relationship to their employees in adverse way. In fact, 75% of them revealed that due to not offering small group benefits related to health insurance coverage, has bad effects to their business.
Reasons for Providing Health Insurance Coverage to Your Employees
So far, based on what we have learned and understand about the small group health insurance, we can arrive a conclusion that providing health insurance to employees is not that costly as many business owners think and doing so will definitely result good outcome to the business and will encourage employees to be productive at its full potential for the company. Now, let’s discuss more about why a small company should give a lot of consideration in providing health insurance coverage to their employees even if it’s not required by the law.
Keeping Top Employees and Finding New Best Talents
Nowadays, group insurance coverage plan is one of the most important benefits for most employees. Offering this kind of benefit attracts new talent as well. This is very true especially to small businesses for the reason that most new employees or talents tend to choose larger company instead of a smaller business. Therefore, great employee benefits including group health insurance coverage will make best new talents to choose your company. You also have to consider that in the future, your best employees may consider to move to another company that can offer them a much better employee benefits. But then again, a great group health insurance plan may prevent this thing to happen in your business.
Tax Benefits
Many employers haven’t learned yet the benefits of offering group insurance coverage when it comes to taxation. The truth is, both employees and employers can take advantage from it. Firstly, all the expenses incurred for providing the insurance coverage would be 100% tax-deductible for the business. In addition, once an employer have done his or her part in taking care the legal paper works of the insurance plan, employees’ contribution can fall into a pre-tax basis. By then, employer can make employees’ contributions before computing their salaries and this make employees not being tax liable related to their contribution and come up with a higher net pay. 
