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Advantages of Group Insurance for Small Businesses

When you run your own business, you’re always looking for things that can help you lower expenses and give you a competitive advantage. But did you know that offering your employees group health insurance for small businesses can do both?

Grand Mutal Insurance is a full-service agency that specializes in business insurance solutions. To us, protection means not only providing comprehensive and competitive rates but being in your corner when others would not.

Advantages of Offering Group Insurance for Small Businesses

You’ll be in Compliance

If you employ 50 or more full-time workers, you’re required by law to offer health insurance coverage that’s no more than 9.86 percent of each person’s yearly income, as Fundera advises. If you fail to do this, you can be hit with a penalty of $2,320 for each employee. This excludes the first 30 workers.

It Offers More Extensive Coverage

With group insurance, you can offer your employees more extensive coverage at an affordable rate. That means they’ll have more options and therefore better care than they would with another health insurance plan for the same price.

You Can Qualify for Tax Rebates

You can receive as much as 50 percent off your contributions towards your employees’ health insurance premiums if you get your plan through the Small Business Health Options Program — or SHOP — Exchange.

To do this, you must:

  • Have 25 or fewer full-time employees
  • Provide coverage for all your full-time workers
  • Cover at least half of the costs of the premiums
  • Pay your full-time employees an average of less than $50,000 each per year

You Can Receive More Tax Benefits

When you pay part of your employees’ health insurance premiums, those expenses are business expenses. This means they qualify as a tax deduction.

It Helps Attract and Retain Top Talent

Did you know that almost 90 percent of companies with over 500 employees offer health insurance, but only 55 percent of businesses with 100 employees or less do so? That could be one of the reasons small businesses find it so challenging to attract the same quality talent as larger companies. After all, for job seekers, finding an employer that offers good health coverage for themselves and their families is a definite plus.

Moreover, 80 percent of workers state that having a comprehensive benefits package contributes to them staying with their employer. Since replacing a worker can cost as much as 50 percent of their annual pay, offering group insurance for small businesses is well worth the expense and effort.

It Increases Job Satisfaction

It’s possible to set up your group health insurance coverage so your employees can use their pre-tax income to pay their premiums. This means your employee have a lower taxable payroll income and makes for happier employees.

It Helps Increase Productivity

Employees who have access to good healthcare coverage are more likely to get their annual physicals, take advantage of other preventative healthcare options and seek medical help when they’re sick. All of this combines to make your workforce healthier — and that, in turn, lowers absenteeism and increases productivity.

Note that so long as you have one or more full-time employees — or 1099 workers who are covered by your Workers’ Comp policy — you qualify for group health insurance. In addition, during the Small Group Enrollment Period from November 15 through December 15, carriers are required to accept groups — irrespective of the number of workers enrolling — on condition that they meet other regular participation guidelines.

Clearly, offering health insurance to your employees has many advantages, both for your business and for your people. To learn more about your options regarding insurance for small businesses, contact Grand Mutual Insurance today!

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