Group Health Insurance: Why Is It More Practical?

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Whatever industry your business is in, competition is inevitable and the need to be competitive as well. But competition isn’t only about reaching as many clients and customers as you can and earning revenue. It’s also about making your company more appealing to prospective candidates. You want a good workplace and reputation that attracts employees and part of this attraction lies in having health insurance for your employees.

If you’re searching for the top talents to work for you, you have to appeal to their better judgment which tells them that they need to be employed by a company that carries a health insurance plan. A health insurance plan will benefit you, and your current and future employees. According to the US Census Bureau, around 85% of Americans have some sort of health insurance, and approximately half of that percentage gets it from their employer or the employer of their spouse.

What Is Group Health Insurance?

In group health insurance, both employer and employee pay for the insurance. As long as you have at least one employee, you can qualify for group insurance so it suits businesses of all sizes. When you pay a monthly premium, the insurance company pays a portion of the medical costs your employees might need. These medical costs could be for treatments, operations, doctor visits, tests, exams, and more. The premium amount and what is covered depends on the type of plan you choose.

You basically have two choices of either paying a high premium or low premium. This will influence the amount you pay for deductibles. If you pay high monthly premiums, you will pay a lower amount for your deductibles for medical care, whereas if you pay low monthly premiums, you will pay a higher amount for your deductibles for medical care.

Why Group Health Insurance Is More Practical

Employers know that their employees are their biggest asset, so they want to help them by enrolling in a plan that protects them. This is when group insurance comes in. If you think your company is too small and doesn’t need health insurance, this article will point out how even the smallest companies benefit and how there are health insurance policies geared toward smaller companies. It’s a given that small companies make an effort to grow and with growth, your employees must be compensated with more than just a raise or bonus. A good place to start compensating them is by providing them with group health insurance.

Here are a number of reasons why small and larger-sized businesses ought to consider group health insurance for their employees.


This is by far the biggest reason why a group plan is better for any business. The premiums are cheaper because they are being spread out upon a group of people. A group plan is designed to be cost-effective because it costs less per person, on average.


Even small businesses may qualify for tax advantage because premiums are deducted from the federal taxes. What you are paying in group health insurance is considered as business expenses, not profit.

Reduced Payroll Taxes

When you offer health insurance coverage to workers, it’s part of their compensation package. This can lead to a reduction in payroll taxes.

Reduce Operation Costs

When employees know they are covered by a plan, they are likely to accept a lower salary. It is much more expensive to get an individual health plan for themselves and their loved ones than enrolling in employer-sponsored coverage. This allows more room for negotiating on a salary or wages.

Relatively Stable Rates

Generally, group premiums have not increased as individual premiums have. The most recent numbers show that group premiums have increased by 5% compared to individual health plans that have increased by 54%.

Get More Productivity

A healthy employee is more productive; it’s as simple as that. With a health plan in place, employees have access to medical care and if they have to stay out of work due to illness, it wouldn’t be for long. One study showed that healthy employees are three times more productive than ones in poorer health. In general, you would be providing a workplace that shows the company cares about its employees. In turn, this will build a good bond between employee and employer. You know that productivity is what you need for your business to thrive and grow.

If you’re over the fence in deciding what kind of health insurance plan you want for your employees, a group health insurance scheme is your better choice for all the reasons mentioned. Consider what kind of coverage you need, who will be covered, the benefits, the costs, and you can find the right group plan that suits everyone and your budget.

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Samantha Acuna is a writer based in San Francisco, CA. Her work has been featured in The Huffington Post,, and Yahoo Small Business.