Gives an overview of employee health insurance and explains the impact on small businesses as well. Also explains how companies benefit from offering insurance benefits to their employees.
Employee Health Insurance - An overview
Health insurance in the United States is an absolute must for any person. The rising costs of healthcare make it prohibitively expensive for anyone to take on the risk of going uninsured. As an incentive to attract the best talent, almost every single major corporation offers employee health insurance as part of it's employee benefits package.
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Reasons for providing Employee Health Insurance
Though medical insurance of employees is an expensive proposition, most large firms offer this benefit in order to avail of tax incentives. In addition, it has been shown that there is significantly lesser attrition in companies where employees have health insurance. This is probably due to the fact that health insurance is much more expensive when funded by as an individual, making employees think twice about leaving. Companies have also found that it boosts the morale of employees.
Under this plan, the corporation pays a large percentage of the premium for health insurance, leaving a much lesser burden on the employee. Those without jobs or those who are self employed find it difficult to settle on reliable insurance plans, though there are a few options for the self employed. In addition, firms are able to place the cost of insurance against their taxes, thereby lowering their liability as well.
Small Business Employee Health Insurance
Small business are often reluctant to provide this important benefit to their employees for reasons of cost. Only an estimated 24% of new small business provide employee health insurance as part of their employee benefits package. It has been shown that the burden of health insurance is greater for small businesses than for large corporations.
Some business choose to self fund their employee health care. This means that they set some money aside regularly in order to pay for any medical eventualities that arise. This is risky since a large claim or a series of claims during any single time period can severely compromise the employers abilty to pay. The employer can be taken to court by the employees for this. Certain businesses solve this problem by enrolling in a "stop loss" insurance plan which protects them from large claims above a certain level.
In general, each small business will have it's own technique of dealing with the problem of providing employee health insurance.
Offering a range of choices
Most employers offer their employees a range of options when selecting their insurance coverage. The variables could be the premiums that are paid and the deductibles - the amount that has to be paid before insurance kicks in. This is useful because not everyone might be happy paying a higher premium each month.
Finally, just because a person is part of large corporation does not mean that they are automatically eligible for the corresponding health plan. Companies can make use of health insurance benefits to ensure that more loyal or hard working employees get better benefits. For example, those who stay with the company for a longer period of time get better incentives.
All in all, before you accept an offer for a new job, it would be a mistake not to examine their health insurance policy and find out exactly what they offer. As an employer, you will have to weigh in the long term benefit of employee health insurance against the immediate financial impact.
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