Providing Employees Access to Healthcare

Offering healthcare access is a valuable benefit for employees, but it is not a one-size-fits-all when determining what to offer.

Here are some things to consider when deciding if you, as an employer, can provide healthcare coverage to your employees.

What does healthcare include?

Healthcare encompasses many employee benefits such as major medical, virtual/telehealth, dental, vision, disability insurance, and life insurance.

Major Medical is your traditional group medical plan and is most commonly considered when discussing employee benefits. A major medical plan provides comprehensive medical coverage – preventative care, office visits, emergency room visits, pharmacy benefits, in-patient or out-patient hospital stays, etc.

If offering major medical isn’t an option for your business, you may consider discount memberships that provide employees with virtual or telehealth options. Some of these plans also offer pharmacy discounts and mental health coverage. In addition to medical coverage, there are various supplemental plans that can be offered. These include:

• Dental insurance – provides coverage for cleanings, x-rays, basic services, major services, and orthodontics as requested.
• Vision insurance – provides coverage for eye exams, lenses, contacts, and frames.
• Disability insurance – provides income protection in the event the employee has to be out of work due to injury or illness. There is short-term disability coverage which typically pays for a period of 90 days or less (depending on the plan selections), or long-term disability, which provides coverage when short-term disability coverage has exhausted.
• Life insurance – these are generally term life policies (for the term of employment) that are usually at a lower cost than private insurance. These policies usually also have guarantee issue amounts that may be beneficial for an employee that has health concerns that may not be able to obtain life insurance elsewhere.

Why offer employer-sponsored healthcare coverage?

There are many reasons why an employer might consider and/or begin offering healthcare coverage.

• Retainment and recruitment – employees have options when looking for employment. Having robust employee benefits, including healthcare, can set you apart from other employers. Employees are more likely to stay with an employer if they have healthcare options versus an employer that may not offer these benefits.
• Employee wellness – if employees have access to preventative care, this can result in healthier employees. Healthier employees typically miss less work and are more productive.
• Employee morale – offering healthcare coverage shows your employees that you care about their wellbeing and can aid in having a positive culture.
• Save on taxes – employee deductions may be deducted on a pre-tax basis. This allows the employees’ gross earnings to be lowered for taxing purposes. At the same time, this reduces the matching taxes that employers pay. To have pre-tax deductions, you will need to have a Cafeteria Plan in place.
• Affordable Care Act (ACA) requirement – if your company has 50 or more full-time equivalent employees, you may be required by the ACA to offer medical insurance that meets the minimum coverage and affordability requirements to avoid IRS penalties.

What is your budget?

The first step in deciding what healthcare coverage you would like to offer is determining your employer budget. Depending on the healthcare coverage you offer to your employees, the employer cost will vary.

When offering major medical coverage, employers are generally required to contribute at least 50% of the employee-only coverage premiums.   When looking at major medical plans, there are many options for plans to help fit your budgetary needs. A plan with a higher deductible and no doctor’s office copayments will have a lower premium than a plan with a very low deductible and lower doctor’s office copayments.

Where major medical isn’t an option, looking into virtual and telehealth options can provide some health coverage to your employees that are still beneficial. Virtual and telehealth options, along with supplemental plans, do not require an employer contribution; however, employers can contribute to the plans to make the plans more appealing to their employees.

Conclusion

You have options when it comes to offering healthcare coverage to your employees! With today’s workforce, access to benefits is becoming more and more important and can aid in attracting and retaining employees.

Written by: Vanessa Perkins, Benefits Director