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Why You Should Offer Health Insurance to Employees

Ella Baker
Why You Should Offer Health Insurance to Employees
Reading time 5 Mins
Published on Jul 9
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Four reasons this benefit is invaluable to your business

While businesses with more than 50 employees are required to offer group health insurance benefits, there are many reasons beyond the law why your company should offer these benefits to your employees. From retaining talent and a healthier workforce to increased productivity and increased odds of landing top talent, health insurance should be a benefit that you offer your employees.

Most sought after benefit

While many entering the workforce may seek the perks of dog-friendly spaces or office snacks, the go-to benefit remains health insurance. According to a survey by Glassdoor, employees reported that health insurance is by far the most important benefit they receive from their employer.

With nearly 80 percent of workers preferring new or additional health insurance benefits to a pay increase, you may find yourself losing employees or failing to land new top talent as your business grows if you fail to offer these benefits. Health insurance is so important to job candidates that higher-quality candidates are less likely they are to accept a position at a company that doesn’t offer this benefit than a company that does. If you want to compete for top talent, health insurance can give you the highest rate of return on recruitment and retention.

Employers who offer health insurance benefits are demonstrating a concrete commitment to the health and well-being of their employees. Health insurance allows your employees to feel more secure, since they know that they will be able to better manage medical expenses. That commitment and peace of mind can help increase your employee morale and loyalty.

Health insurance is a top priority for your current and potential employees, and so it should be a priority for your company. Offering this benefit can help you recruit and retain talent and keep your employees committed to your company.

Tax benefits

It’s a simple truth – employers and employees pay less for insurance when they purchase it as a group. Your business can enjoy significant tax benefits by offering health insurance to your employees.

When your employees purchase insurance independently, they are using post-tax dollars to do so. But when your employees participate in a company-offered health insurance program, they pay for that insurance with pre-tax dollars which can represent a 30 to 45 percent savings on health insurance plan costs.

By offering health insurance benefits, your company can enjoy tax deductions on all employer contributions to premiums, reduced employer payroll taxes, and reduced workers’ compensation premiums. Employers don’t pay payroll taxes on the employee-paid portion of health insurance premiums, and you don’t count that portion toward the calculation for determining your company’s workers’ compensation premiums. Your business can also deduct 100 percent of your employer-paid portion of the premium as a business expense. If you have fewer than 25 employees, your company may also be eligible to receive a tax credit if you purchase small group health insurance for your employees.

Offering health insurance benefits both you and your employees financially. From out-of-pocket costs savings for your employees to tax deductions for you, health insurance can help put both you and your employees on better economic footing.

Preventative care boosts productivity

In a recent study from Metlife, more than 60 percent of employers reported that offering health insurance has led to increased workplace productivity. Additionally, the CDC has reported that employees who make preventative care a priority get more accomplished at work. By offering insurance benefits that encourage preventative care, your company can increase your productivity and keep your employees healthier.

Lost time and productivity due to preventable illness is one of the top drains for companies year after year. Prioritizing the health of your employees and offering health insurance that allows them to see a doctor for preventative care can help reduce the number of sick days used by your employees. When your employees are able to stay healthy, they get more done at work.

Worrying about health and how to pay for doctors’ visits can cause significant distractions for your employees, preventing them from being their most productive and successful selves at work. Employer-offered health insurance programs can help remove those distractions and help your employees focus on workplace obligations.

ACA Assessments

Finally, it’s the law. As of 2015, employers with 50 or more full-time equivalent employees are required to offer affordable, minimum-value group health insurance. If your business fails to do so, you may be assessed government penalties.

Your partners at Sheakley can help

From building a healthier, happier team to actually saving money, there are many reasons to take the plunge and offer health insurance to your team. Offering health benefits signals that you care about your team, ultimately building a culture of trust.

Offering a group health insurance to your employees is easier and more affordable than you may think. Sheakley’s HR Outsourcing and PEO experts can help you identify the right health insurance benefits for your company and employees and manage the enrollment process for you as your business grows.

Schedule your free consultation with a Sheakley PEO professional today. Stay up-to-date on all things Sheakley by subscribing to our blog and following us on social media. Join in the discussion by commenting below.


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