Health benefits are becoming more commonplace in modern businesses. According to the Kaiser Family Foundation, employer-sponsored insurance covers nearly 155 million nonelderly people. Receiving health insurance through an employer remains the most common way that Americans get health benefits.
Employer-sponsored health coverage not only includes insurance for current workers and their families, but may also include benefits for retired employees. In addition, federal law provides former employees the opportunity to remain on their employer’s health insurance for a specified period of time after leaving their job, at the employee’s expense.
The Affordable Care Act (ACA) requires employers to offer health coverage to employees if they have 50 or more full-time or equivalent employees. However, offering these benefits can be beneficial to all parties involved. Learn more about employer-sponsored health benefits and why they are beneficial for employees and employers.
Direct Benefits From Employer-Sponsored Health Plans
Employer-sponsored health plans provide workforces with an affordable way to maintain essential health coverage. Having a large portion of medical expenses paid through an employer’s benefits package can provide employees with peace of mind and boost employee satisfaction.
Employer-sponsored health plans have also been found to increase retention and reduce absenteeism by creating healthy employees that are more likely to be productive. These plans act as powerful recruiting tools, especially for employees trying to decide between multiple job offers.
These health plans can also be convenient. It can take considerable time and effort to look for private health coverage and the cost is usually much higher compared to group rates. With employer-sponsored health plans, employees can avoid the search and choose a plan that works for them and their families.
Business owners and their families can also personally benefit by participating in group health coverage for themselves. Enrolling in individual coverage can be more costly. Group insurance spreads the risk among a group of individuals, making it more affordable and easier to obtain.
The Value of Quality Health Insurance in the Workplace
Approximately 55 percent of Americans receive their health insurance through their employers and employers are responsible for paying nearly 75 percent of premiums, according to a Kaiser Family Foundation survey. The value of quality health insurance in the workplace is undisputed, helping employees learn about their health and adopt healthier behaviors.
Many employers choose to promote employee health by encouraging workers to seek care from their health providers and to become more informed about their healthcare options. Access to healthcare education helps to improve care, increase the likelihood of patients following treatment plans after appointments, and patients asking important questions about their medical tests, treatment options, and prescriptions.
Providing employees with quality healthcare benefits can have immediate and ongoing advantages. Employees who are provided with quality health insurance typically feel more appreciated, resulting in increased morale and job satisfaction.
Access to quality healthcare benefits has also been shown to reduce absenteeism, increase staff retention and create a positive work culture with good relationships between supervisors and coworkers.
Reduced Direct Medical Costs, Improved Productivity, and Tax Benefits
In recent years, rising healthcare costs have made it more difficult for businesses to continue paying for health insurance. With employers forced to cut costs due to challenging economic times, many employees have missed out on the opportunity to improve their health and save money. The implementation of new and more costly technologies and medications has also added to these costs.
While the initial cost of health insurance can be concerning for many employers, the many benefits that health plans offer to both employees and employers make them worth the investment. Compared to individual plans, employer-sponsored health insurance can actually save money. The premium cost is typically split between the employer and employee with the employer covering the larger majority of the cost.
Improved productivity is another perk of employer-sponsored health benefits. Poor employee health can have a direct impact on productivity in the workplace. According to the Centers for Disease Control and Prevention (CDC), predominant health conditions like diabetes, high blood pressure, physical inactivity, smoking, and obesity cost employers in the US upwards of $36.4 billion each year due to absenteeism.
Tax breaks are available for businesses that offer employer-sponsored health insurance. Premiums paid by employers for health insurance are generally exempt from federal income and payroll taxes. In addition, the portion of premiums paid by employees is usually excluded from taxable income. This results in lower tax bills for most workers and a reduction of their after-tax cost of coverage.
Employee Productivity Reflects Decreased Absenteeism and Presenteeism
Employee wellness plays a direct role in employee productivity and engagement. Following the COVID-19 pandemic, it is more important now than ever before that business leaders ensure that their employees are physically and mentally doing well. Absenteeism and presenteeism are two ways that managers and other business leaders can measure employee well-being.
While often used interchangeably, absenteeism and presenteeism are two unique issues that affect modern businesses. Absenteeism occurs when employees are not present at work due to an unplanned absence. For example, an employee may call in sick or has to deal with a family emergency. Presenteeism is when an employee is present at work but is not doing their job or is unproductive.
Absenteeism is to be expected in the average workplace setting to a certain extent. However, some issues can exacerbate this problem, such as disengagement, workplace burnout, depression, high levels of stress, injuries or illnesses, lack of childcare, or job hunting. On the other hand, presenteeism is often caused by having little to no paid sick days, high employer expectations, heavy workloads, or demanding workplace culture.
Expanding Employer-Sponsored Health Coverage
According to the Economic Policy Institute, roughly 6.2 million employees have lost access to their employer-sponsored health insurance since the onset of the COVID-19 pandemic. Fortunately, many employers are taking the necessary steps to expand their employer-sponsored health coverage to encourage more job candidates to return to work.
A report from the Business Group on Health found that 65 percent of employers view their health and well-being strategies as an integral component of their workforce strategy. After seeing the impact of the pandemic on health and well-being, many employers are anticipating higher chronic management needs and a higher prevalence of mental health issues.
Many employers are continuing to develop new health and well-being programs for on-site and remote employees and expand focus on all aspects of health.
Learn More About Employer-Sponsored Health Coverage and Wellness Plans
Employer-sponsored health plans are expected to produce a 47 percent return on investment (ROI) for employers in 2022, according to a study from Avalere Health. These savings will likely stem from reduced direct medical costs, tax benefits, and higher productivity among employees.
Building a well-structured employee benefits package can make all the difference. The experienced advisors at New City Insurance have helped countless companies build plans that cost half of the national average without sacrificing network access or benefits.
Gain access to proven strategies to maximize employee benefits cost savings while helping coverage increase over time. To learn more about how employer-sponsored health benefits can be a win for both employees and employers or to request a consultation with an advisor, contact New City Insurance.