Employers - Can You Afford to Health Insurance?

Are you aware that 100% of the health insurance premiums you pay to cover your employees are a business deduction? The Employee Benefit Research Institute (EBRI) found that fifty-seven percent of small employers did not realize the tax advantages of health benefits, which helps to make this benefit more affordable.

EBRI also found in its survey that small employers who offer health benefit believe they help with employee recruitment and retention. They also cite increased productivity and reduced absenteeism as additional sound business reasons to provide these benefits.

Many small employers fear their employees will not be able to quality, but found that nearly all states and the federal government recently passed laws to make health insurance more accessible and affordable for many small employers. More than 60 percent did not know that insurers may not deny health insurance coverage to small employers even when the health status of their workers is poor.

What changes are most small employers seeking before offering health insurance? The EBRI found a number of factors that would increase the likelihood a small business would consider offering health benefits:

1. Two-thirds of small-business owners said they would seriously consider offering health benefits if the government provided assistance with premiums.
2. Almost one-half would consider doing so if insurance costs fell 10 percent.
3. In addition, one-half would be more likely to seriously consider offering a health benefits plan if employees demand it.

Another question many small employers are trying to answer is whether to offer employees dependent (family) coverage. EBRI found that nearly 50 percent of workers who offer dependent coverage as an option do not take the coverage because dependents have coverage from another source. Twenty-seven percent report their employees decline dependent coverage because they cannot afford the premiums.

Affordability for the employer and the worker is clearly a critical factor affecting the likelihood of switching health plans. Nearly all employers who have switched health plans within the past five years cite cost as the main reason. One-third of companies offering health benefits think they will change coverage, and 5 percent think they would drop coverage if the cost of health insurance were to increase by 5 percent.

Find out if offering group health may be an affordable option for you. An expert advisor near you can help review your options and find the program that is right for your company. Click here to request a quote.