You may consider providing health insurance to your staff as a small business owner, especially since a recession seems likely in the coming months. Any business may find it difficult to offer small business health insurance, and you may wonder why you might do so as one of your employee perks.
For instance, providing health insurance benefits like reimbursement for medical supplies to your employees is beneficial, but what about the employer? Are there any benefits to group health insurance in terms of money and taxes? Can providing small business health insurance help you attract and keep employees?
You might be surprised to learn that small business health insurance has various benefits that can make your business run more strategically, effectively, and efficiently. A group health insurance plan for small businesses can help employers in a variety of ways, in addition to the benefits it provides to employees. Such as:
Lower monthly premiums are available
Given the lower cost of a group health plan, offering small business health insurance might make financial sense. Small business health insurance plans typically have lower average per-person costs than individual market health insurance. Small business health insurance plans not only have monthly premiums that are typically lower than those of individual plans but also have seen less price growth overall.
Take advantage of tax incentives
The tax advantages that come with a group plan for the employer are another financial benefit of offering small business health insurance.
There are several ways that a group health plan can benefit your company’s taxes:
In general, employers can completely deduct from their federal business taxes the cost of the monthly premiums they pay for qualified group health plans.
It’s also possible that providing health insurance to employees as part of their compensation package will result in lower payroll taxes for the employer.
The small business health care tax credit might be available to some employers.
The small business health care tax credit could help some small businesses
The Affordable Care Act (ACA) created the tax credit to encourage small business owners to give their employees group health insurance.
For a small business to be eligible for the tax credit, it must meet all of the following conditions:
Your small business must have fewer than 25 full-time or equivalent full-time workers (to receive the maximum tax credit, your business must have less than 10 employees). Average salaries at your business must be less than $50,000 per worker per year (adjusted for inflation).
Make your hiring and recruiting plan better. At least half of the health insurance premiums for your qualified employees must be paid by the employer. To buy group health insurance, you must use the Small Business Health Options Program (SHOP) Marketplace or a licensed health insurance agent who can sign your business up for a SHOP plan. As of 2018, licensed insurance agents can help write SHOP plans directly through the carrier. Employers who are eligible for the small business health care tax credit can sign up for eHealth through licensed and SHOP-certified agents.
Getting health insurance for a small business can be an important part of a good hiring plan and help a company stand out as an employer of choice. An extensive eHealth study found that 66 percent of surveyed small business owners said they offer medical employee benefits to help them find and keep the best workers.
Despite the current bout of inflation, most businesses can offer employees some kind of healthcare option. This is crucial to attracting the best talent in today’s job market. Try it. We promise you’ll like it.