Affordability: For employees that are not eligible for subsidized plans on the individual market, some of the group plans are lower cost than the plans on the individual market. In the case of the Blue Cross HMO plans, they are, on average, about 40% cheaper than the individual market. An employer only needs to cover 50% of the employee only cost for the lowest cost plan in their options. This is usually a much lower cost than most employers realize.
Choice: Unlike the individual market, employees and owners would have access to PPO options in the group market. We are also able to set up a variety of plan options inside each group plan so that employees can pick a plan that best suits their specific needs.
Taxability: By running employee health and dental insurance contribution through your payroll with a Section 125 plan you are able to make the whole contribution tax deductible, not only are you saving the 7.65% SSN and Medicare contribution on your contribution, but also on the contributions your employees make.
Your employees would also save the same 7.65% contribution as well as the federal tax rate on their contribution. This is especially advantageous for any employer that currently pay their employees a stipend (without an HRA plan), as a straight stipend is considered Salary and fully taxable to both the employer and employee.
Employee Retention and Attraction: One of the key reasons to consider a Small Group Health insurance plan is the Retention of your key employees and the attraction of new employees you may like to hire. A recent Glassdoor survey of employees ranked insurance (40%) as the most important benefit they get, outranking things such as Vacation (37%) and bonuses (35%). That same survey showed 55% of employees say these benefits are an important reason they stay with their company.
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