Large businesses typically have a hiring advantage over small businesses because it is easier for them to offer health care to their employees. The main reason behind this is that insurance companies offer discounted rates for companies that have a large number of workers. This does not mean that small business owners are completely unable to offer benefits, though. In fact, it is in every employer’s best interests to make health care available to each of their employees.
Will Health Insurance Increase Productivity?
It is common sense that a healthy worker is a better worker; your employees will be able to get the medical care that they need and get back to work more quickly if they have access to health care. In addition, providing employees with ready access to medications reduces productivity loss due to illness. Employers who do not offer health care are going to have to deal with more sick time, as well as the adverse impacts on the productivity of those who choose not to stay home when they are sick.
How can a Small Business Offer Health Insurance?
Many small business owners get wrapped up in the overall expense of providing health care and this can cause them to neglect some of the options that are available to them. For example, the federal government provides a tax credit of up to 35 percent to encourage small business owners to provide insurance. In 2014, the tax credit will be increased to 50 percent. Although this will not offset the entire cost of offering insurance, it will make the cost easier to bear.
In addition to the government’s tax break, it is also possible for an employer to negotiate a salary deal with their employees. In other words, if the employer’s cost of insurance for each employee is $40 a week, the employer could consider asking their employees if they are willing to take a $1 an hour pay cut to have insurance. Many employees would rather have health insurance, especially if taking a pay cut will make their monthly premiums less expensive. Another option is to offer health care that requires a 100 percent payment from your employees. Although this is a very expensive option for your employees, some of them will still prefer it over having no insurance options at all. If you can get enough people to sign up for it, they should all benefit from a multiple policy discount.
If you are unable or unwilling to provide insurance coverage to your employees, you are going to need to seek private insurance. By offering health care options at work, however, you will be able to take advantage of the discounted rate that is offered for multiple policies. Therefore, by providing coverage to your employees, you are also ensuring that you can provide coverage to yourself.
Should I Offer Health Insurance?
Every small business owner needs to weigh the pros and cons of offering insurance. From a philosophical standpoint, however, it is definitely the most socially responsible decision to make. After all, if one of your employees gets sick and they cannot afford to get medical care, everyone in your company could end up with the same thing. There is also a big push in the U.S. towards providing everyone with health care, and it is going to become increasingly difficult to find skilled workers who are willing to put their time in without receiving health benefits.
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