Importance of Medical Insurance Small Business
Medical insurance helps protect any individual/family from financial losses for the costs incurred on account of an illness or injury. As per the United States’ Census Bureau, an estimated 85% of all Americans have some or the other form of medical insurance. Almost 50% of Americans that have coverage get it via their employer/their spouse’s employer. There are various reasons why it makes business sense for small business owners to offer insurance benefits to the employees & their families.
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Medical Insurance Small Business is a type of insurance that an employer purchases and offers eligible employees of the company & the eligible dependents of those employees. Typically, the premium cost is split between the employer & employee. There is also a minimum percentage-rate that the employer is required to contribute towards the premiums. These premiums generally increase with every passing year and are based on the healthcare costs of that employee group in the previous year.
The Benefits for Businesses
With Medical Insurance Small Business which generally covers a group, the risk gets spread over the organization and the total number of employees you are covering. This type of insurance may also be called small group plan, job-based health insurance or employer-sponsored health insurance. Companies that offer Medical Insurance Small Business benefit as it:
- Increases Competition- Small businesses that offer medical insurance as a part of their employee-benefits package can attract a larger number of qualified applicants compared to those that don’t. This is more evident within businesses of the same size, that operate within a specific industry
- Reduced Operating Costs- It is an excellent way of keeping a handle on operating costs. This is because, employees are generally willing to settle for jobs at lower salaries if that company provides them and eligible family members with Medical Insurance Small Business A company owner is able to easily negotiate a lower salary and reduce operating costs
- Improved Productivity- When you have a healthy workforce, it has a positive impact on the productivity of your company. Employees that have health insurance tend to be out sick from their work for fewer days. Studies have found that healthy workers are 3-times more productive compared to those who are in poor health
- Tax Advantages– A small business that offers medical insurance can also show their part of the contribution towards their employee-plan as a business expense & get a tax credit. In case of an incorporated business, its insurance & the coverage paid for the employees are deductible
- Lower Insurance Costs– Businesses are able to get much better insurance rates compared to individuals. The general rule is that larger the group- lower the insurance rates for everyone involved. The risks are spread across more people and this lowers the cost. Thus , it is beneficial for a business owner to provide coverage to their employees and the latter benefit too
In addition to all of this, since health insurance is such an important aspect, when a company provides Medical Insurance Small Business to its employees, it increases their morale and they are happier working there.
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