Five Reasons Why Your Business Must Offer Group Health Insurance
There are many advantages that you can offer to your employees like a monthly incentive to the best employee, gift cards on their birthdays and wedding anniversaries, gift vouchers on festivals like Diwali, Christmas, etc. Out of these, the best benefit that you can offer them is a health insurance policy. This is because it keeps your employees happy and it also shows that you care for them.Read more
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Many owners of small businesses agree and offer the benefits of health insurance policies to their employees. If we talk about figures, then one out of four companies having approximately 100 employees offer health insurance through a group health insurance plan. Let us see the top five reasons why a business offers group health insurance:
Reasons for Having a Group Health Insurance Plan:
- It is easier to provide health insurance policy: Most of the companies/ businesses think that purchasing a group health insurance policy is a difficult task and expensive. This is not true because when you purchase a plan for several people, you get it at a comparatively lesser premium. Moreover, you can compare different group health insurance plans online and select one as per your requirements.
- It makes your employees happy: According to a survey by a leading portal, employees of various organizations by far consider health insurance as the most important benefit from their company. This is the reason businesses or employers must provide health insurance policy as a benefit to their employees and then add other advantages over time. The top three advantages that an employer can offer to its employees are:
- Health insurance
- Pension plans
- It saves money on taxes: An employer can claim a deduction of tax for the premiums that it has paid for the group health insurance plan for its employees in India. However, an employee is only entitled to get the medical benefits and facilities, but he/she is not eligible to claim tax exemption under Income Tax Act for the premium that has been paid by the employer. In addition to this, it is not added under the taxable salary of an employee for calculation of tax.
- Enhanced retention and loyalty of employees: A rise in the salary of an employee is one of the ways to retain employees and gain their loyalty. However, it is not always a feasible option especially when your business is small. In that case, offering a group health insurance plan can be an effective method for gaining the loyalty of your employees and retain them. It is seen that four out of five employees prefer incentives and benefits like health insurance plan by their employer than a pay rise. In addition to this, small and medium-size businesses can lose a considerable number of employees, if they have not provided perks or incentives like group health insurance plans. Therefore, as per the need of an hour, it is suggested to provide a group health insurance plan.
- Satisfied and Happy Employees Are More Productive: With a group health insurance plan, employees gain more access to medical facilities. Such employees work with peace of mind as they will get medical benefits in case of any health issues or illness. For small businesses, offering a health insurance policy to employees can lead to more satisfied and happier employees, which improves their productivity. In addition to this, easy access to medical requirements can contribute to an early return to work for the employees. So, in the end, healthier employees can make the workforce more productive and can result in more success for the small business.
Challenges in Offering Group Health Insurance
The main idea behind a group health insurance policy is to provide health insurance to a large group of people with a minimum insurance premium, which minimizes the risk for insurers. Therefore, the majority of start-ups and small businesses are unable to provide group health insurance policies as they have a lesser number of employees. However, the Insurance Regulatory and Development Authority of India (IRDAI) has mandated a minimum number of employees as seven for availing of the group health insurance plan. So, in a nutshell, we can say that:
- Due to the smaller number of employees, a group health insurance plan becomes an expensive affair for the majority of small businesses.
- For a company with a small number of employees, a group health insurance provider does not offer customization in the structure of the policy. Benefits such as maternity cover, pre-existing disease cover, etc. are rarely offered to organizations with a lesser number of employees.
Group Health Insurance Benefits for Employees
The employees get the following benefits from a group health insurance policy:
- The policy provides insurance coverage to the insured from day one.
- It is a cheaper option than individual health insurance.
- The maternity benefit that is not offered in an individual health insurance plan is offered in a group health insurance policy for employees or their wives.
The Final Words!
Being an employer, you want your employees to focus on their work so that they can be the most productive. Worrying about health issues and the day to day increasing medical treatment cost can drain the time and energy of your employees. Moreover, purchasing individual health insurance and family floater plan can be difficult for many employees. So, if you offer a health insurance policy for your employees and their family members like spouse and dependent children, then it can be of great help. You can gain the loyalty of your valued employees, and the retention rate may improve as you offer one of the best benefits. In addition to this, if an employee is free from the burden of medical expenses, he/she can focus more and give the best results.
You can as well segregate your group health insurance plan and offer different coverage as per the grade of your employees or their level in the organization. In this way, you can provide better medical facilities to the most valued employees. It can as well provides a sense of satisfaction.