Employee Incentives: Health Insurance

The current and continuing increases in medical costs can be a major issue for many Americans, especially when they require medical treatment.

Group health insurance plans are offered by an employer of a member organization. Members of the plan usually receive coverage at a lower cost because the risk to the insurer is spread across multiple members.

Under the Affordable Care Act (ACA), businesses with 50 or more full-time employees must provide health insurance to full-time employees and dependents under the age of 26 or pay a fee.

Employers with fewer employees might also choose to have a plan as part of an Employee Incentive Scheme.

Approximately 50% of Americans with health insurance coverage gained this through group plans provided by their employer. However, many of them have little idea how their plan works.

Group health insurance provides many benefits, but when your insurance plan is tied directly to your employment, you will usually lose this cover if you change jobs. In 2017, 22% of uninsured Americans reported losing their health insurance due to job loss or change in employment status.

The 2002 movie John Q, starring Denzel Washington, is an example of one of the traps of employer-provided health insurance. In the movie, due to a downturn in business, his employer changed health providers to save money, and when John’s hours were reduced temporarily, he became classified as a part-time employee.

This resulted in him and his family no longer having full cover. When his son suffered a significant medical event requiring ongoing treatment. The plan in place when he began employment would have covered everything, but the new cheaper plan and his temporary part-time employment status meant only some of the initial medical costs were covered, and none of the major costs would follow.

Benefits of Group Health Insurance

Many employers provide supplemental health plans, which include dental coverage, vision, and pharmacy coverage, either separately or as a bundle.

The main benefit is lower premiums. A 2018 study found the average premium cost per individual in a group health insurance plan was $41/month cheaper than an individual plan. The same study discovered small group health plans had an average deductible of more than $1,300 less than individual plans.

Family members and dependents can be added to group plans at an additional cost to members. These assists families with sole providers, or where other family members don’t have group health insurance with their employer.

Group health insurance plans provide numerous tax benefits to both the employer and employee. Employers’ costs are tax-deductible, and employees’ premiums are made before tax, reducing their total taxable income.

Smaller businesses may also qualify for the small business health care tax credit.

Who can get Group Health Insurance?

To be eligible for an employer’s group health insurance, an employee must be on payroll and the employer must pay payroll taxes. Independent contractors, retirees, and seasonal or temporary employees are not eligible. If you take unpaid leave, you may be ineligible for group coverage until you return to work.

Make sure you know what cover you are entitled to if you work less than full-time hours, even if only for a temporary period.

Coverage must also be offered to an employee’s spouse and dependent children until age 26, though some employers may increase the age, provided children are still dependents. Unmarried partners of the same or opposite sex, may also be eligible for the same cover as their spouses.

Without a doubt, job seekers favor employers with a group health insurance plan, but it is important to fully understand what the plan covers and any changes.

Check out http://www.cbs-cbs.com as a starting point for advice on how a group health insurance plan could be a great fit for your business as part of an employee incentive scheme.