In short, absolutely. Healthcare benefits are optional for most small businesses and not necessarily a main priority if you are a small business owner, but they are of critical importance to most employees. More than 75% of employees who say they have good healthcare benefits also report high job satisfaction, according to a recent MetLife study. Employers everywhere should then be aware of the pros and cons of offering health benefits to their employees.
Many employers mistakenly believe they cannot afford to offer benefits. And while this penny-pinching mentality may benefit them in the short-term, the reality is that it could strangle the business’s chances of success in the long-term.
The positive side to offering employee benefits as a small business are that it could jump start the business’s growth. Employees that receive benefits feel valued, and as a result will be more satisfied, miss fewer workdays, be less likely to quit, and have a higher level of commitment to meeting the company’s goals.
Benefits are a critical part of an employee compensation package, and healthcare benefits are the most valued, along with paid vacation time. Every employer must consider whether to offer these types of benefits especially if it means that they stay competitive. Offering healthcare is also a means of attracting and retaining the most qualified employees.
From a business point of view, there are tax advantages to offering healthcare that you don’t get from offering other benefits. Small businesses with fewer than 25 employees may be eligible for a tax credit for purchasing health insurance for their employees. Businesses don’t have to contribute to their employees’ health insurance, instead offering them the opportunity to take advantage of their group purchasing power to obtain better rates through the business.
Through ensuring the wellbeing of workers, businesses can offer preventative care that can keep employees healthy and working – especially useful in businesses that are physically demanding where healthcare can provide access to specialist care.
The cost is probably the biggest thing putting employers off providing healthcare benefits for their staff. Healthcare costs to employers have risen 59% since 2000, far outstripping wage gains. Between 2003 and 2004 alone, premiums went up 11.2% while wages only increased by 2.3%. These costs are draining valuable resources from many small employers, with financial uncertainty making it difficult to offer any such benefit.
The administrative hassle that comes with offering such a benefit can also be a hindrance in setting up healthcare for employees; with time needed to choose the insurer and fill out forms, remit premiums and act as an intermediary between employee and insurer.
Providing health insurance does not mean that a business won’t be liable for accidents and injuries suffered by employees while at work. Equally, although the chances of it happening are very small, the potential for liability for selecting a health care provider that commits malpractice on an employee does exist. Several employers have been sued by their employees for what they contend was their employer’s carelessness in selecting a provider.
Healthcare and other benefits can be massively beneficial, especially to a small business. Although the initial cost can be daunting, the value to employees and their wellbeing should provide serious long-term gains making the whole process incredibly worthwhile and should be a serious consideration to any business owner.
As a full service ideas company, we have a lot of heads under our roof – and they’re all integral! And, despite the size of your company, or the size of your workforce, you need to be thinking about each and every employee. It doesn’t matter if it’s 10 or 100.
In an ideal world, there would be a coverall – but this isn’t an ideal world. You need to sit down and look at your workforce and their needs as both individuals and as a group. You’d go a long way to find a group of people who don’t think medical cover for the workplace isn’t a good idea.