When you think about what the most valuable asset in your company is, you might be tempted to think about your machinery, maybe your new high-tech product, your intellectual property or your even brand. However, if you’re like most businesses, your most valuable assets are your employees. They are the ones who run the machines, create your IP and sell your products to generate revenue.
What is Group Health Insurance?
Group health insurance works just like individual health insurance but insures multiple people and can be tailored to meet the specific needs of your business and employees. Instead of individuals buying it for themselves, premiums are paid for by their employer; employees would still be responsible for their own deductibles and any applicable co-payments.
Group health insurance refers to a broad category that covers everything individual health insurance covers. From regular medical insurance to pay for things like hospitalisation, outpatient expenses and vision and dental coverage to maternity benefits, long term disability and life/critical illness coverage.
Do I need Group Health Insurance?
Companies like Google and Goldman Sachs have such intense hiring processes because they know the importance of having high quality employees. Skilled workers are in high demand and can be expensive to replace. The Society for Human Resource Management estimates that it costs 6-9 months’ salary to replace an employee, especially when taking into account hiring and training costs. For higher paid executives, that cost is even higher.
If your employees are highly skilled or hard to replace, it makes sense to put employee retention measures in place. Of the many methods available, group health insurance is one of the most effective. In a 2011 survey commissioned by Sanofi-Aventis, when offered a choice between $20,000 USD in cash or keeping their benefits, most people close of keep their benefits.
Showing employees that you care about them, through a group health insurance plan, also increases workplace morale and ultimately makes your employees more productive.
How much does it cost?
As a business owner, it’s very important that you understand costs and can articulate a return on investment, even on your employee benefits programs. Group insurance plans are usually less expensive than individual plans for the same coverage because risk is spread over a large group rather than concentrated in 1 person.
Usually, premiums are fixed for 1 year and are based on limit, deductible, amount and type of benefits and the age and number of employees insured. Geographic area of coverage also plays a role, if you’d like worldwide coverage, you would likely have to pay additional premiums. Thankfully, like any other business expense, premiums are fully deductible and benefits paid to group members are tax free.
For a more detailed quote or to learn more about your options, contact us.