Insuring your employees may be more affordable than you realize
As a small business owner, you want to attract and retain good talent to help your business grow. You’re also juggling rising costs, a tight labor market, and the impact of a global pandemic. So, while you want to reward your employees for their hard work, you also want to make sure you are making the right decision for your business.
While it’s common to reward employees with an annual salary increase, it may be time to offer health benefits, instead. An increase in pay may seem like a compelling reason to stay with or leave a company, but increasingly, health insurance is a major draw. Even before the pandemic, 37 percent of employees were willing to exchange higher pay for more generous benefits, according to the 2019/2020 Global Benefits Attitudes Survey from Willis Towers Watson.
Offering health insurance to your employees is also a good business decision. Here a few things to consider:
- Tax hit vs. tax advantage. With a salary increase, you and your employee will take a tax hit. The employee will lose a portion of that raise to income taxes, and your payroll taxes will also increase. On the other hand, offering health insurance benefits has significant tax advantages. That’s because your contributions to employee health insurance premiums are exempt from federal income and payroll taxes. Plus, employees can pay their premiums with pre-tax dollars through a payroll deduction. You may also qualify for the Small Business Health Care Tax Credit, which is worth up to 50 percent of the costs you pay for your employees’ premiums, or 35 percent if you are a non-profit employer.
- Health insurance benefits offer more value. Choosing a salary increase for your employees means they are on their own for health insurance. While some employees may have coverage through a spouse, others have to foot the bill themselves. A standard raise will likely not cover health insurance for a year. Employees who have had to pay for their own health insurance know its value, and understand health insurance provides peace of mind, as well as better health.
- Health insurance keeps your employees healthier, happier. Every time an employee walks out the door, it costs you. The cost of replacing an employee can range from one-half to two times the employee’s annual salary. Employees are more likely to stay if they have coverage and like their health plan. Having access to health care positively impacts your employees’ physical and mental health status, and overall quality of life. It helps prevent and treat illnesses. It’s also a great way to show your employees that their overall health is important to you.
The good news is that group health insurance may be more affordable than you realize. There are many ways to make the costs manageable. For example, you can pay a portion of the monthly premium, so that you don’t have to shoulder the entire cost. There are other options available, too, like level-funded plans, to help make your insurance more affordable.
Let us help.
Browse your small group options and get a free, quick quote today with Blue Cross and Blue Shield of Kansas. Our Sales Consultants can help you find the best options for your business. You can also call us at 866-584-0171, Monday through Friday, 8 a.m. to 4:30 p.m., or email your questions to email@example.com.