In today’s improving job market, small-business owners constantly struggle to find and retain top employees. Group health benefits are valued by potential workers and can therefore greatly broaden your choices.
Federal law defines businesses with two to 50 full-time employees as “small employers.” To form a group and offer health benefits, you need two employees (including an owner, if desired). Note that if you insure one full-time employee, you must offer coverage to all, and the same rule applies to any part-time employees you cover.
Many employers pay the entire premium for their employees, while others pay 50%, with employees paying the balance through payroll deduction. Some tax benefits may be available to employers who contribute to employee health premiums.
Health insurers base their rates on several factors, including employee age and sex. They can’t charge more for certain health conditions or exclude those with preexisting conditions. Also, your insurance carrier will want to ensure that you have workers’ compensation; without it, a work-related injury may impact group health coverage.
Allow at least six weeks to place coverage, especially during the busy Affordable Care Act enrollment period. Necessary documentation includes articles of incorporation, quarterly wage statements, plus a short application for each employee you want to cover.
While group health helps attract and retain a better workforce, research also shows that healthy employees perform better and use fewer sick days. And, most importantly, no one wants to see a valued employee, with no access to group coverage, bankrupted by medical bills.