Health Insurance for Your Employees
Monday, July 16, 2012
In a previous post we took a look at which benefits rank the highest with employees and determined that there is a clear number one: health insurance.
While offering a health-insurance plan will not come cheaply, the cost is tax-deductible and can provide a strong incentive to the best job candidates at any given time. Whether you’re just starting out and looking to hire your first employees, or have been in business for some time and would like to review your health plan, try following these five steps to help get your employees the coverage they need at a price that your business can afford.
- Talk to your employees, or survey them, before choosing a plan. There are dozens of options when it comes to health plans, getting input from your employees not only gives them a chance to voice their desires, but it gives you an opportunity to encourage them to use their benefits wisely and to remind them to think of their health insurance coverage not as a gift from their employer, but as part of their overall compensation package.
- Get help. Choosing a policy and a provider is a big deal and the process can be laborious and confusing. That’s why most entrepreneurs utilize the services of a health-insurance broker who can offer a range of plans from a number of different insurers. Try to find a broker with experience dealing with firms of your size in your industry, and make sure to get some references so that you feel confident you’re dealing with a reputable person. In addition to brokers, your state’s insurance department can be a good source of information on options for small businesses.
- Consider giving employees multiple options. If you’ve got a diverse workforce, you’re going to need a health plan with some diversity too. What works for the twenty-five-year-old single guy is not going to work for the forty-year-old mother of four. Offering both a high- and a low-deductible plan combined with a health savings account should cover most of the bases. Health Reimbursement Arrangements are another increasingly popular option, for more on those see this article from the HBS archive.
- Invest in a healthy workforce. Many insurance plans offer the option of adding a wellness program that helps to promote a healthy lifestyle through benefits like discounted gym memberships. While the exact perks may vary, the idea is always the same: a healthy workforce that requires less medical care results in lower premiums for your company, not to mention decreased absenteeism and increased productivity.
- Be creative. If you’ve got a very small company or not all of your employees are interested in health coverage, you may not have enough people to qualify for a group plan, but that doesn’t mean you’re out of options. If you have just a few employees who need insurance, consider reimbursing them for part of the cost of an individual policy, or join a larger health group, such as the state Chamber of Commerce. As I pointed out in our previous post, employees actually place a higher value on their benefits than they do on the cash component of their compensation, so helping them purchase health insurance actually gives you a better return on your dollar compared to increasing their salary and leaving them to fend for themselves.
While there is no doubt that you’ll need to spend some time and money setting up and maintaining a health plan, it can result in positive returns for you, your employees and your business.
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