3. What benefits are there to giving health insurance?
While there is no legal requirement for a small business to provide health insurance, there are several reasons why you should. Health insurance will help you attract talent because individuals value benefits packages when looking for work.
As a small firm, you may not be able to give the same remuneration as larger corporations, but you can compensate by providing appealing benefits such as health insurance. In reality, two-thirds of businesses give health insurance as a means to recruit and retain workers.
Also, a healthy staff is a happy workforce, and prevention is better than needing to find a cure. Providing health insurance demonstrates to employees that you care about their well-being, which boosts morale, improves satisfaction, and aids in talent retention.
You also want to urge your staff to look after their health — both physical and emotional — as illness-related lost productivity costs US firms roughly $530 billion per year. There are also financial benefits to providing health insurance.
You can usually deduct your contributions from your taxes, and there are also state-by-state tax benefits available. If you use the Small Business Health Options Program (SHOP) Marketplace to obtain your health insurance, you may also be eligible for federal tax benefits or tax credits.
4. How do I get a health insurance policy?
A health insurance policy can be purchased in a variety of ways. The following are the most common for small businesses:
• Group health insurance policies: These plans are available through the federally administered SHOP Marketplace. This was once the most popular option for small enterprises, but due to high costs and a lack of flexibility, it is no longer an option for many.
• Qualified small employer health reimbursement arrangement (QSEHRA): Established by Congress in December 2016, the QSEHRA is quickly becoming a popular option for small businesses. Businesses grant employees a tax-free monthly allowance, and employees use that money to choose and pay for their own health care. The benefits of QESHRA include the ability for employees to choose their own plan and the fact that it is far easier to handle administratively.
• Association health plans: Small businesses can band together with other small businesses to purchase large-group health insurance (which is reserved for companies with more than 50 employees). This operates in the same manner as a standard group health insurance coverage.
