Rivers and Rivers CPAs

Navigating healthcare benefits can feel like an overwhelming and daunting task, especially for small businesses. It’s not just about offering health insurance; it’s understanding what it entails and choosing the best options available for you and your employees. In this article, we’ll provide a high-level overview of healthcare benefits, along with options and types of plans to consider.

Healthcare benefits defined

Think of healthcare benefits like insurance policies that cover your employees’ medical expenses. These benefits can range from basic medical coverage (e.g., primary care, emergency services, doctor visits) to comprehensive plans that include dental, vision and mental health services. While you may consider offering healthcare benefits as just a perk, it’s an important aspect of your employees’ well-being and their job satisfaction.

Why you should offer healthcare benefits

There are several reasons for offering healthcare benefits to your employees, including:

• The ability to attract and retain talent. Many job seekers look for positions that include comprehensive health benefits. And if your business offers these benefits, you become more attractive. Employees are more likely to stay with an employer who invests in their health and well-being, which can reduce turnover.

• An increase in employee engagement and productivity. Employees with access to healthcare benefits are more likely to address any health issues more quickly. This can help reduce absenteeism and increase productivity. Also, employees become more engaged and motivated when they feel that their well-being is a priority.

• Tax advantages. Offering healthcare benefits can provide tax benefits for small businesses. If your company pays the premiums, they’re generally tax-deductible, and some small business health insurance programs may also qualify for additional tax credits.

Weigh your options

Understanding the basics of healthcare is crucial when making the right choice for your business and your employees. Here are a few common types of healthcare benefits to consider:

• Traditional group health insurance. With this most common form of employee health coverage, employers select a group health insurance plan and offer it to their employees. The employer typically covers a portion of the premium cost, while employees pay the remainder. Group plans usually offer comprehensive coverage, but they can be more expensive.

• Health reimbursement arrangements (HRAs). HRAs provide more flexibility than traditional group plans. They allow employees to choose their individual health plans, and the business reimburses employees for qualified medical expenses up to a certain amount. This option is a more cost-effective solution for small businesses.

• Association health plans (AHPs). AHPs allow small businesses to pool together to purchase health insurance at a lower rate. They can be formed by businesses within the same geographic area or industry.

Considerations to make

When you’re choosing the best healthcare plan for your business and employees, there are four things to keep in mind:

1. Cost. What can your business afford, and how much of the cost will be shared with employees? 

2. Employee needs. What are the demographics and healthcare needs of your workforce? 

3. Provider network. Does the plan have a wide network of doctors and hospitals? 

4. Coverage details. What types of medical services are covered?

Providing health insurance

Offering the right healthcare plan for your business is a significant step. You’re investing in your employees’ health and the future of your business. Whichever plan you choose, make sure you educate your team on the benefits being provided and consult with insurance brokers or benefits consultants to find the best fit for your business.