If you want to attract talent and retain your employees then your business needs a well-designed group health insurance. Even though it may seem expensive, purchasing a well-planned policy will be easily available even for small businesses. Research has shown that employees who have good health coverage by their employers are more productive. Employees feel valued and appreciated and work harder at making the business better for everyone.
The universal health care system in Canada covers all Canadians but supplemental private health insurance helps to cover some of the expenses not covered under the public health care plan. These include health practitioners, dental, eye care, prescription medication, and medical equipment and appliances.
The challenges faced by employers when considering group insurance
Not all employers have the same needs, yet until recently benefit options were the same, whether it was for a small or large business. One of the most pressing concerns, especially for small business owners has been the cost and how this can be shared with employees because long-term commitments are often difficult for small businesses to plan or sustain.
Demands on the time of employers and their lack of expertise in the area of health care insurance also scare them off because unlike big companies, they usually don’t have HR departments to process claims and any other issues that may crop up.
However, employers do understand that their relationship with their employees would be greatly improved if they provide group health coverage for their employees, mostly because they will have peace of mind and feel secure in their jobs.
Even though not legally required in small businesses employers who want to offer group health insurance need to consider the financial situation of their business so that they can work out the amount that it can afford to pay annually.
Why should businesses buy group health insurance?
The cost savings of group health insurance makes it quite affordable to offer to employees. The more people in the group insurance the lower the premiums will be. This means that employers can look at better insurance plans with more coverage. This is often better than most people can afford to pay on an individual plan. However, there are some Canadian insurance companies that provide health insurance for businesses irrelevant to their employee size. These providers usually calculate the premium based on the pool of insured individuals in the province. This will be a great choice for small businesses with fewer than 10 employees. When considering purchasing health insurance, your advisor should tell you how the insurance provider calculates the premiums for the insured.
In addition, the majority of health insurance providers allow the business to select the benefits for their employees however they see fit. For example, if the employer thinks drug insurance is more important for a particular employee than dental care, he can choose drug insurance for that particular employee; in other words, the employer does not need to choose a uniform plan for everyone. Typically, younger employees do not opt to get drug insurance and like to have dental instead.
Tax incentives to businesses
One of the biggest advantages for employers that offer their employee’s group health insurance is that they get health care tax credit if they pay for part or whole of their employee premiums. One of the approaches that employers can consider is that instead of providing a raise to their employees, they can provide them with health coverage. For full-time employees working 160 hours a month, a basic plan could cost the employer as little as $0.31 per hour. Once the cost is broken down, employers usually realize that the health plan is not that expensive after all.
Benefits for employees
With the higher number of people in the group, there is more value for those insured since businesses are offered better insurance plans at lower prices. There is also better coverage for any pre-existing conditions.
Employees can get a better deal than if they were planning on getting an individual insurance plan and if employees have dependents they are also protected under the cover. Children are covered until they are 19 if they are not a student and up to the age of 22-25 if they are studying (depending on the provider). If one member of a family has group health benefits from their employer then their spouse may not need coverage from their employer.
It has been observed that when everyone in a business, including the employer, is covered by a group health insurance plan then people are more conscientious about getting regular check-ups and discussing any health problems. When employees are healthy, they take fewer days off and are an asset to the business.
Employees who leave a firm can then convert their group health plan into individual coverage within a certain period.
Usually permanent and full-time employees are covered, but employers can also cover part-time employees and contract workers.
If employees have no benefits, they pay out of their pocket for certain health care expenses and this is after they have already been taxed for their income. With group health insurance, these expenses can be paid from pre-tax income benefiting employees.
In conclusion
Health insurance costs are significant for small businesses and increases sometimes make them unaffordable. However, these can be customized to make them more affordable, especially if both employers and employees contribute toward them.
Our expert advisers will help you work out how to get a cost-effective group health insurance cover for your employees. Importantly, we will ensure that it is within your annual budget and will meet your needs and those of your employees. Traditional benefit solutions could include basic life, extended health, and dental cover. On the other hand, you could opt for a stand-alone healthcare account or other flex options.
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