With the politically charged debate on federally sponsored health care, it’s too early to tell whether the laws will shift in either direction in the near future. But in the meantime, it’s worthwhile to seriously evaluate one of the biggest costs of running a small business.
According to data from the Organisation for Economic Co-operation and Development, the United States tops the list of having the most expensive health care in the world. Missed health checkups and untreated issues can potentially become more serious in nature; absenteeism, missed targets and other productivity problems can occur as a result.
If you’re on the fence as to whether this benefit can fit in your budget, there are some compelling reasons why this perk is well worth the expense. Below are a few factors that helped my company decide to offer high-quality health care as part of its employee compensation package.
There’s an established correlation between wellness and performance.
Research finds that healthy employees are more productive. Programs beyond the most basic health care coverage can encourage a better level of well-being, engagement and utilization of important illness-prevention services. Other data suggests that disease management and prevention wellness-focused programs beyond basic-level health care can help companies save roughly $136 per participant.
According to another study, simply having health insurance is linked to lower levels of stress when compared to those without coverage. Beyond physical health, a strong wellness plan typically includes mental health services. More inclusive plans can further reduce stress while promoting psychological well-being and higher levels of self-satisfaction.
Long-term positive effects can outweigh the costs.
Research suggests that offering high-quality health care supports long-term employee retention. By limiting turnover, high-quality health care can help your company reduce cost burdens of constantly sourcing and training new employees. Company-sponsored plans can help ensure that all of your staff have access to more affordable health care while also stressing the importance of self-care.
Positive, healthy lifelong habits and dependable access to affordable health care can also mitigate or reduce the chance or severity of chronic issues. Some health care plans also include reduced gym memberships or other physical fitness incentives; maintaining a healthy employee population is one way to keep insurance premiums down.
Excellent health plans attract top performers.
With a strong job market, job seekers can be more selective when searching for work. Employers without coverage or high-quality choices may not be seen as competitive; health care is often viewed as one of the most critical deciding factors in a compensation package, outside of pay.
Even a moderate- to lower-paying establishment can win over top performers with more attractive coverage. When given a choice between a better-paying job and a lower-paying position offering better benefits, an overwhelming 88% of survey respondents indicated that higher quality insurance, including medical, vision and dental, would help them consider working for the lower-paying company.
Though health coverage remains a large cost to companies big or small, the investment in overall staff well-being can certainly help improve or bolster your enterprise’s reputation as one that cares for its employees. Companies with attractive benefits packages, including well-rounded health plan options, often receive positive press that further attracts exceptional employees.
Business financing and tax incentives may be available for small-business owners.
If you’re still on the fence about whether you can afford a workplace-sponsored plan in a small-business setting, business funding, such as a business line of credit, can help seasonal businesses get by in times of low cash flow. Access to revolving credit is especially useful for small-business owners, as you can save on interest by borrowing the amount you truly need.
It’s also worth researching available tax incentives to help you subsidize the cost of high-quality health care. Federal programs may be available for small businesses that pay over a certain percentage of their employees’ health care. According to the IRS, the largest health care tax credit available is for very small businesses with low average annual salaries, so owners may offer this benefit even if they don’t operate a large-scale business. Additionally, a handful of states may also offer health care subsidies for small businesses, so make sure to take advantage of any local tax credits.