How do you attract top talent? It’s more than just the salary that you pay your employees; the benefits you offer them are also a key factor to entice the talent that you want. And if there’s one benefit that ranks higher than others it’s health insurance. A 2018 Clutch Report surveyed more than 500 full-time employees, and found the following insights:
- 62% of companies provide health insurance to their employees
- 55% of employees say that health insurance is the most valuable benefit to them
- Millennials (44%) value health insurance less than Generation X (62%) and Baby Boomers (62%)
Why Employee Health Insurance Matters
Offering health insurance to your employees shows that you care for their physical and mental wellbeing, and that you place value on them and not just their work. This also holds true for employers who manage distributed teams. With the wealth of information available and the access of technology at your fingertips, there are no excuses for not getting your remote employees health insurance.
You might be asking, “Why do I need to provide health insurance if I already pay the mandatory health insurance as per the country’s regulations? Isn’t that enough?” Many countries have a mandatory health insurance system for employees to benefit from local healthcare services.
However, because the local healthcare system is public and open to all local employees, there can be issues in terms of the quality of healthcare that is received as well as the lack of preferential treatment that is given. Many employers choose to find their own health insurance providers to ensure quality, priority, ease, and efficiency.
The Benefits of Employee Health Insurance
But let’s be honest, insurance premiums are not cheap and – given the rise of insurance premiums in the last few years – employers are getting more and more anxious about just how much they have to cover. “Is it worth it?” you might be asking. Before you make up your mind, here are a few advantages to providing your employees with health insurance...
- Attract and retain top talent: We’ve already mentioned this earlier, but it’s worth mentioning again. Employees don’t just look at the job description and the salary when deciding on their next job. The one thing that gives a company an advantage over another is the benefits that they provide. Don’t just stop at health insurance, offer more paid vacation leaves or offer to pay for transportation costs (if any), internet bills, cover the cost of a company laptop, etc. You can also offer perks such as a gym membership, food allowance, and more. Your generosity when it comes to your people has no limits, and the more enticing your benefits, the more edge you have over the rest of your competition. Another 2018 survey done by America’s Health Insurance Plan (AHIP) shows the following results:
- 46% indicated that employer-provided health insurance played a role in recruitment
- 56% indicated coverage remains a key factor in their choice to stay at their current job
- 71% of those surveyed were satisfied with their current employer-provided health coverage
- Employer contributions to health coverage significantly improve (77%) the employer’s favorability
- 68% of employees chose their physical health over financial health
- Reduced operating costs: Once employees see the benefits you are able to provide, many are willing to work for a lower base salary to receive the benefits. This is because in many countries the cost of getting personal health insurance can be quite high as compared to getting health insurance connected with a company. In the same AHIP survey, it was noted that 31% of employees value employers for making healthcare affordable. Of course, not all employees will agree with this, as not all employees agree that health insurance is the most valuable benefit. But you can always negotiate this with your potential employee before you hire them.
- Tax advantages: A majority of countries across the globe have listed health insurance as a tax deductible. This means that you won’t get taxed for this business expense. What some companies do is that they offer slightly lower base salaries so as to pay less in payroll taxes, but make up for it with the health insurance premiums that do not get taxed.
- Lower insurance costs: This is basically a concept of wholesale versus retail pricing. Businesses – even small to medium enterprises – can usually get better prices than individuals when it comes to insurance. The more people you add to a group insurance plan (you can even add yourself!), the less costs for you and your company. This isn’t just beneficial for the employer who has much less to shell out, but also the employee who gets to save on the pricey individual health insurance costs. Another 2018 study done by eHealth, noted the following:
- The average premium per-person through a small business plan was 7% lower than the average premium for an individual health insurance plan
- The average individual deductible for small business health plans was 31% lower than the average deductible for individual health insurance coverage
- Increased productivity and morale: It’s pretty simple really. The healthier your employees are, the happier they will be. A 2020 study by MetLife found that 60% of employers say offering health insurance has led to higher productivity levels. The Centers for Disease Control and Prevention (CDC) also noted that employees who prioritize preventive care get more accomplished at work.
How to Get Started
Despite the numerous benefits of health insurance, there are a few obstacles that stand in the way of employers. Besides the obvious one of increased costs, the daunting task of choosing a reliable and trustworthy healthcare provider can dissuade employers from providing a health insurance benefit.
This can be especially difficult if you’re managing a distributed team, which means having to look for a specific local health provider or an international health provider that will be able to cover all your employees from different countries around the world. Add to this the administrative stress that comes with filling out forms and remitting premiums, and the overall time and effort of this process can be a hassle many employers are not looking forward to.
However, there is an easy way to get around this. Professional Employer Organizations (PEOs) like Multiplier will take care of everything for you. From choosing a credible healthcare provider to taking care of the administrative work, all you need to do is focus on building your business and leave the worrying of your team to them.
When you hire a PEO, you must opt in to and pay for coverage under the PEO's policy in addition to carrying your own insurance. When you hire an employer of record, your employees are covered by the EOR's insurance policy. The EOR ensures that all insurance regulations, including healthcare mandates, are followed. Your employees' health insurance is provided by the EOR on your behalf.
They already have trusted healthcare providers in their network and can easily take care of the necessary paperwork you need to get your employees set up. Besides healthcare perks and other employee benefits, you can even use Multiplier to pay your remote employees and comply with local labor laws. You can rest easy knowing that Multiplier only has the best intentions for your remote employees.
British magnate and entrepreneur Richard Branson is quoted to have said, “Take care of your employees and they will take care of your business. It’s as simple as that.” Many employers will agree that their employees are their greatest asset and also one of their most valuable resources. Yes, health insurance is quite a costly benefit, but think of it as an investment on your people which you will earn back in productivity, loyalty, and trust.