The Affordable Care Act requires large companies with 50 employees and more to offer health insurance. One of the best ways companies can comply is through group health coverage. Group health coverage is very valuable to employers and their employees. The plan offers health insurance at a low cost. It also spreads risk to all employees in the group health plan. If you intend to get the group health coverage plan, you should know everything it concerns. Here are the top things you need to know about group health benefits for large businesses.
1. How the Group Health Insurance Plan Works
Large companies purchase the group health insurance plan to offer medical coverage to 95% of their full-time employees. One thing that employers should note is that group health insurance plans vary. However, they have the following same characteristics:
- Employees’ children below 26 are included in the plan
- Employees and company share the health premiums
- Group members can choose to enroll or decline the coverage
- Companies need to offer coverage to at least 95% of their full-time workers or full-time equivalents or face penalties.
A large company needs more than 50 employees to qualify for group health insurance. The critical point is that the employees need to be full time.
2. The Premium Benefits of Group Health Coverage
Premiums are monthly payments that businesses need to pay for coverage. The employer is typically responsible for paying at least half the employee-only premium. Thus, they get to enjoy the benefits that come with group health insurance.
If you compare individual and group health insurance plans, the group plans are more affordable. Group health insurance usually has lower premiums. It is because the plans have large risk pools that ensure their affordability.
The large business employee health insurance spreads risk across the entire plan members. It means that other members’ premiums balance an individual employee’s high insurance cost.
3. The Tax Benefit of Group Health Insurance
Group benefits for large businesses include employer and employee tax benefits. The amount of money that an employer pays towards premiums is typically tax-deductible. All company expenses concerning health insurance are 100% tax-deductible on federal and state income taxes. The tax benefits ensure that companies experience a win-win situation if they purchase the group health plan. You will get to retain and attract top talent while enjoying tax exemption in some areas. Also, any premium an employee contributes will not fall under federal taxation. It means that pre-tax contributions ensure an employee’s taxable income is lower. Thus, employers and employees benefit from the group health plan.
4. Group Health Coverage Benefit on Employee Turnover Rate
57% of job seekers consider an employer’s benefits before accepting a job. Furthermore, health insurance increases an employee’s job satisfaction rate. Thus, large businesses offering group insurance plans will benefit from a low employee turnover rate. An excellent health insurance plan increases employee loyalty. It also ensures that HR managers can easily find the best talent for a job. The best talent often looks for companies where they can get maximum benefits. Furthermore, the chances of employees quitting companies that offer group health insurance plans are lower.
5. Employers Can Choose a Group Coverage that Meets their Needs
The Affordable Care Act establishes that large businesses should have a health insurance plan for their employees. However, you have the freedom to select a coverage that meets your needs. For instance, you can choose a high-deductible plan with a health savings account. At Kirby Employee Benefits, we have a team of experts ready to help you with your group health coverage. Contact us to learn more.