A group health plan is an insurance plan that provides coverage to a group of employees who are employed by the same organization. According to Investopedia, group health coverage works as follows:
The organization purchases the plan and offers its employees the option of obtaining coverage through it. Note that most plans are only valid if at least 70 percent of employees participate.
In some cases, plans are available in different tiers ranging from basic to more advanced. Some plans even offer dental and vision coverage in addition to medical coverage.
How Group Plans Work
In a group health plan, the employer and the employees split the insurance premiums between themselves. The premiums are more affordable than individually bought plans because the insurance company’s risk is spread across multiple policyholders, making it considerably lower.
Some plans allow employees to add their spouse, children, or other dependents for an additional cost. Note that it is possible to have healthcare premiums deducted from employees’ pre-tax salaries.
Benefits for Businesses
If you are a small business owner, group health coverage can offer the following benefits:
Tax benefits for your company:
Typically, 100 percent of your premiums are deductible on both your state and federal tax returns. There are also additional tax credits available for qualifying small businesses, as The Hartford reports.
Affordable healthcare for employees:
Compared to individual health insurance plans, group plans usually offer significantly lower premiums. In addition, in the event employees need medical care, the costs are much more manageable than with individual plans or no insurance at all.
Improved access to care for employees:
Because this type of plan generally includes preventative care, employees stand in a better position to look after their health.
Increased productivity and performance:
When your employees are healthier, they’re able to be more productive. Moreover, when they’re not concerned about or hampered by any health issues, they’re more likely to perform to the best of their ability.
Reduced absenteeism:
Because your employees have better access to affordable care, they may be less likely to fall sick. Plus, in the event they do fall sick, they’re more likely to return to work sooner.
Improved employee recruitment and retention:
Many job seekers are looking for employer-provided healthcare. They simply won’t consider positions that don’t offer it. Offering a good health insurance plan is a strong negotiation point when it comes to attracting the best candidates to your company — and retaining them.
Last, but certainly not least, offering your employees group health coverage can make them more loyal to you, which results in decreased turnover. And that can help reduce your costs associated with talent recruitment and retention.
To learn more about purchasing group health coverage for your business, contact us today. Grand Mutual Insurance is committed to providing individuals and companies with the best coverage plans suited to your unique needs.
Sources
https://healthcoverageguide.org/part-one/reasons-to-purchase-group-coverage/
https://www.investopedia.com/terms/g/group-health-insurance-plan.asp
https://www.thehartford.com/business-insurance/strategy/employer-health-insurance/tax-benefits
