If you are a small business owner, it can be difficult to keep track of all the costs associated with running your business, especially when it comes to payroll and benefits. One of the most important things you can do for your employees is providing good quality health insurance. It has numerous benefits including happier employees, healthier employees, employees that know you care about their long term wellbeing, helps lower employee turnover and much more. Here are four reasons why your employees deserve quality health insurance from you.
1) Improves Employee Retention
The cost of finding and hiring a new employee is expensive both financially and with spent time. If you want to make sure your employees stay with your company long-term, they need to be happy with their jobs. Good health insurance helps retain workers by offering a low-cost way for them to access preventative care and keep up with regular checkups. In addition, when employees have health insurance from their employer they’re more likely to participate in preventative screenings and annual checkups—which can help lower their risk of developing chronic conditions down the road.
As a result, fewer sick days are taken. According to a recent study, employers who offer health benefits save on average $2,000 per year on health care costs per employee. One of your biggest concerns as a small business owner should be turnover rate. Good quality health insurance reduces employee turnover: if you’re offering medical coverage, higher quality candidates are willing to apply for positions with your company since they know they will have good insurance if they are hired. A great benefit package does not only improve morale at work; it saves you money too! The cost of employee turnover is high and it is important for you to do everything possible to reduce turnover. The cost of training a new hire and the learning curve is expensive for any business.
2) Increases Employee Job Satisfaction
Offering quality health insurance keeps employees more satisfied with their job and they are less likely to quit. Lower employee turnover is good for your business because it reduces hiring and training costs, increases productivity and decreases operational expenses. In addition to making it easier to attract top talent, offering health insurance makes your company a more desirable place to work. Good benefits can lead to employee loyalty and a workplace that feels like a family rather than just another business. Finally, providing health insurance sends a message of care and consideration toward your team members. Providing health coverage lets them know you value them as individuals rather than just assets on your balance sheet.
Many companies that offer a high level of employee benefits are able to get those benefits at reduced costs and also importantly, some employees will consider lower salary ranges when being hired if the benefits are that much better. It saves them and your business money in the long run. It is well known that employees that are happier with their job produce better results, work harder and more efficiently and are less likely to leave their job or even search for new jobs.
3) Higher Qualified Individuals Apply
Offering great benefits attracts better qualified and more experienced employees. This is important because we all know how hard it can be to find good employees and as a business owner you want to have the best work for you. Higher qualified employees have more experience, are better educated and thus they cost your business less money – and typically make your company more money as well. They know what they want from their career and will not take jobs that do not meet those needs so they will also provide higher quality work. All of these things lead to lower employee turnover and happier long term workers.
It also improves your business because better qualified employees typically produce better results. The results of a Gallup poll found that workers who were insured were more likely to look for work opportunities with employers that offered health insurance. This means that employees you are hiring coming from a company with good health insurance would rather stay at the current job (they are not fond of) if the new company does not offer similar or better health insurance. If you want to keep your best employees, it’s important to offer quality benefits like health insurance.
It is important to understand that employees are investments that you and your business have invested a significant amount of time and resources in. You hire them because they will provide a service that will increase the value of your company. Because of that reason, like most investments you want to do everything you can to ensure that the value of that investment only increases over time. A healthy and happy employee will perform better for you and result in higher value to your company and increased profits.
4) There are Tax Incentives for the Business
If you are a small business owner, it is important to understand that there are tax incentives for you and your employees if you choose to offer health insurance. These benefits are not just for large companies; in fact, many smaller businesses qualify for these incentives. So, when it comes time to decide how much to pay your employees, look into your options in terms of quality health insurance and what kind of impact that will have on your company.
Taxes are something that many businesses often overlook when considering numerous factors from health care benefits to buying new equipment. The benefit of being able to write off things like health insurance saves your company money and also increases employee satisfaction. It is important that you discuss the tax incentives with your accountant who should be familiar with all of the programs available.
5) How do I choose the right health plan for my employees?
In choosing a health plan, you’ll want to find one that’s affordable and high quality. In terms of affordability, consider what your employees will be paying for premiums and out-of-pocket expenses in order to make sure they can afford coverage. You might also consider cost sharing in addition to premiums—in other words, how much employees would have to contribute in addition to their premium payments in order to get a specific benefit (such as dental coverage or prescription drugs). A good rule of thumb is looking at what percentage of medical expenses are covered by your plan rather than just looking at premiums alone—for example, many group health plans only cover 80% of medical costs. Health insurance is confusing to understand for individuals let alone businesses try to cover multiple people. It is not uncommon to pick a plan that you think is great but ends up having numerous hidden costs you were not aware of.
It is helpful to call an insurance broker, they are very familiar with all the available options and can give great insight into which health plan would work best for your company. They are familiar with all the options you have, what most employees actually care about and what will be the best plan for your business both from a financial standpoint but also from the tax savings side as well. They also provide excellent advice in choosing the right plan for your company and your specific employees.
We can help you find a consultant or advise you on other employee retention tactics that work and have proven themselves time and time again. Visit our site at SayWhat Consulting.
Written by David Phillips, CEO and Founder of SayWhat Consulting. With over 20 years of experience, Mr. Phillips has consulted with small, medium and large businesses in marketing, business management, staff training and day-to-day operations. SayWhat assists clients in numerous industries including cosmetic surgeons, plastic surgeons, med spas and attorneys in family law and criminal law. We also assist other industries as well and our primary clients are small and medium sized businesses.