Providing Health Benefits: The Good, the Bad, the Ugly (and the Answers!)

Need help understanding the positives and negatives of providing health benefits to your employees? We have the guide for you.

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Offering healthcare coverage is crucial for hiring and retaining talent — but it comes with costs and responsibilities

Whether you’re new to the healthcare coverage market or looking to make changes in the benefits you provide employees, navigating what to buy and why it’s important is a balancing act. You need to determine the advantages of providing benefits against the cost and administrative requirements. Recognizing the role healthcare coverage plays in your ability to hire and retain talent is important. Understanding all the costs and responsibilities that go along with providing coverage is critical.

The good

When asked what employer-provided benefit is most important in their decision to take a job, the overwhelming majority of Americans point to healthcare coverage for themselves and/or their family.

When asked what employer-provided benefit is most important in their decision to take a job, the overwhelming majority of Americans point to healthcare coverage for themselves and/or their family. Even with Affordable Care Act exchanges and options for coverage, most workers want their employers to provide coverage in some manner. Small and medium-sized businesses often face challenges to find coverage at a reasonable price point, but the return on investment is strong.

Recruitment

Your company has access to a larger candidate pool and a higher level of talent when you offer healthcare coverage. Good workers know they’re a hot commodity; they will look for the best company to join, which means the one that provides the best possible benefits package.

Retention

Employers lose a lot of time and money they spend on recruiting and training staff members if turnover is high. Lack of healthcare benefits can significantly contribute to loss of staff. If your company is continuously losing talent who move on to companies that provide medical coverage, short-term savings are costing long-term dollars.

Healthier staffers

Employees who have access to healthcare coverage are healthier. They go to the doctor when they’re sick and get treatment to quickly recover. They don’t come to work ill and infect their colleagues. SMBs see a reduction in absenteeism and presenteeism (coming to work sick), which is a boost to productivity for everyone —  including colleagues who don’t have to avoid their sniffly coworkers.

Tax benefits

There are tax credits available to SMBs that invest in healthcare coverage for employees. From deductions of the cost of benefits as a legitimate operating expense, to the Small Business Health Care Tax Credit for companies that employ less than 25 and purchase coverage through the SHOP (ACA) marketplace, there are tax benefits for every size employer and every level of coverage they offer.

The bad

Cost

For most small business owners the only thing standing between providing coverage for employees, and often themselves, is what they perceive may be the cost. Healthcare is one of the priciest line items for any business, and small business owners often assume that the small size of their company will increase the cost of coverage. But that may not be true. Coverage through a third-party provider, through ACA exchanges, or even direct from carriers may be more affordable than you think.

Many SMBs poll employees to inquire about their comfort level contributing to healthcare coverage costs. You may be surprised at how much your own staff would be willing to chip in. And remember, any costs you incur as a business, including coverage for yourself and your family, is a tax deduction.

The ugly

Compliance

Compliance is a concern for all businesses when it comes to providing coverage that meets regulations for factors like non-discrimination. For many SMBs, who don’t have the skills of benefits professionals on staff, this can be daunting. If you feel healthcare coverage is important to attract and retain talent (and grow your business), it’s critical to find a third-party provider who can help navigate compliance. These professionals are full-time benefits gurus who can not only help you stay on the right side of any applicable regulation, they can teach you a few things about benefits as well.

Administration

Managing healthcare benefits for employees is another task SMBs dread. The paperwork involved alone is challenging for large businesses; for small to medium sized entities that don’t have a benefits admin on staff, the prospect can be overwhelming. It begins with shopping for the best possible coverage at your price point and understanding fully what benefits you’re purchasing. If you don’t speak insurance, it can be difficult to understand.

New hire and existing employee enrollment needs to be done quickly and correctly, the first time, to assure staff members get the coverage they want and aren’t stuck with substandard healthcare until the next open enrollment.

Annual open enrollment periods lead to a nightmare of paperwork that has to be completed and submitted in a short window of time. Even for large companies, open enrollment is an administrative nightmare: for small businesses it can be an overwhelming time drain they don’t have the availability or resources to manage.

If you’re managing enrollment or open enrollment manually, filling out forms by hand, assuring they’re complete and correct, and then sending them off to different carriers makes the opportunity for errors and omissions very real. Getting it right the first time is a huge drain on time and resources: having to go back and correct later only adds to the problem.

During the plan year, employee questions will need to be addressed, as well as issues about coverages and prices. Dealing with these problems can drain time and energy for you and your staff members. If you don’t understand insurance-speak (and who does), you may have to hire an expert to interpret it for you.

The answers

Working with a professional healthcare benefit provider is the answer. Whether you purchase coverage from a carrier you source on your own or work with a third party to find a carrier that works for you and your staff, it’s best to leave managing benefits to the pros.

You know the value of providing healthcare coverage in attracting and retaining talent and keeping a healthy workforce. If you can overcome the challenges that providing it requires, the choice is easy.

Working with a professional healthcare benefit provider is the answer. Whether you purchase coverage from a carrier you source on your own or work with a third party to find a carrier that works for you and your staff, it’s best to leave managing benefits to the pros. When it comes to purchasing, administering, or managing coverage(s) why reinvent the wheel? Professional assistance is the answer.

When SMBs get help with benefits, the work is done by trained professionals who know how to:

  • Get the best coverage
  • Quickly and easily manage enrollment
  • Get your staff members the answers they need, when they need them

Online enrollment eliminates paperwork (always a good thing) and gives staffers the chance to review their options in depth, on their own time and with family members who can help them make the right choices. You’re not chasing down people and paperwork — it’s all handled online by professionals.

Outsourcing benefits administration is key for small business. The work involved in managing policies and enrollment is time spent away from running and growing your business. Working with a professional benefits administration provider not only helps you get back to the business of running your business, it gives staff members the benefits they want and the help and information they need.

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