Health insurance offers protection to an individual or family from financial burden arising due to an injury or medical emergency. According to the U.S. Census Bureau, 85% of the Americans are insured under some form of health insurance. And nearly 50% of the Americans are covered under their employer’s health insurance or their spouse’s company. There are several reasons why it makes good business sense for both small and large business to provide medical insurance benefits to their workforces and their families.
Corporate health insurance cover not only plays an important part in recruiting but even more importantly in retention.
A new survey shows that:
- 56% of the adults in U.S. A. with employer health cover said that medical insurance coverage is a key factor in deciding to stay at their current job.
- And 46% believe that health insurance is either a positive influence or a key deciding factor
Small business owners have multiple choices in terms of a corporate health plan including the co-pay, split between employer/employee premiums, and the coverage benefits. And here is quick rundown why it is beneficial for business-owners/corporates/employers as well as the employees.
Health Benefits Make Your Employees Happy
An employee survey by Glassdoor mentions that medical insurance scheme is on the most important benefit that their company provides. For this reason, employers should offer medical insurance as their first company benefit, and then add on more benefits over time.
As per the Glassdoor’s study, the three most important factors or benefits that make teams the most satisfied are:
- Health insurance
- Pension plans, 401(k)
- Vacation and PTO
- Other retirement plans
In simple words, if the medical cover is a top priority for your employees, then it should be a top priority for your business organization as well. Providing it can help with hiring and entice them to stay employed with your firm for a longer duration.
Reduced Operating Costs
For businesses, this is a great way of keeping the operating costs, because some employees would agree to a lower salary when the employer is providing good health insurance benefits. Because it might cost more to buy a health insurance plan for self or family than to get employer-sponsored coverage, thus it balances the lower salary quotient.
Lower Insurance Premiums
Group health insurance purchased by employers costs lesser than a standalone health policy. The more the number of people insured, the lower is the policy cost as the risk is spread across a larger group of people that ensures costs stay low. Therefore it is beneficial for a business owner to extend coverage to the employees to benefit from lower medical insurance costs.
Businesses can avail tax-exemption benefits for the premium that they pay towards their group health insurance plans for their employees. If the business is merged, the business owner’s insurance and the coverage paid for employees are deductible.
Organizations that provide medical insurance as part of their employee benefits package increase their chances of hiring more qualified applicants in comparison to those who don’t. And it holds true when industry competitors of like size provide medical coverage to their employees.
Improved Morale and Productivity
As per a study by MetLife, 60% of employers say providing medical insurance has led to higher productivity levels in their workforces. And according to the CDC, employees who prioritize preventive health-care checkups also get more proficient at work.
Every employer would want his employees to focus on their productivity. And worrying about health insurance premium or not able to pay for medical treatment can hamper their productivity. And if they are insured under an employer health plan, that entire burden is shifted from them to you and that also helps in building their trust and reliability on their company. There are different health insurance that you can provide to your employees.
In plain and simple terms, a healthy workforce is always more productive. Employees who are covered under health insurance continue working and are out sick from work for fewer days. An Australia-based study it was revealed that workers who maintain their healthy were three times more productive than those who could not. Moreover, staff morale also remains higher.
The Flip Side
However, in developing nations like India, Corporate health insurance plans may seem to be attractive on the surface, but don’t provide a comprehensive long-term solution to the employees. A majority of the corporate policies come with inadequate coverage and land-up employees in trouble during emergencies, especially during the ongoing pandemic.
Moreover, corporate health insurance in India ceases to be effective when the employee changes to a new company and they would never know what kind of coverage the new employer provides. It’s prudent to buy a separate individual health plan, family health plan, or a comprehensive health plan that they can use all through their life. Due to the dependency on employer-provided health insurance, the majority of the Indians end-up paying for their medical expenses from their pocket.
- A corporate health insurance plan in India generally includes the covered employee’s spouse and children, and parents also covered in some plans, which totally depends on the employer
- Typically, it compensates a fixed sum insured amount for hospitalization in case of illness or accident
- To increase your sum insured the employee needs to pay an additional premium
In case of unemployment like in COVID-19 scenario, a major portion of the employees is left uninsured. So, it seems imperative to also have a standalone medical insurance cover along with corporate health insurance to stay financially secure should there be a medical emergency, not only Coronavirus but any other serious illness. Or the flip side, that the employers start to provide comprehensive health coverage without many limitations.
And there you have it.
From building a happy and healthy team to saving money, there are several reasons to take the plunge and offer the right and adequate health insurance to your workforce. Offering medical insurance benefits signals your concern towards your resources, ultimately building a culture of trust in the organization.