When Obamacare passed in 2010 there was some speculation that small businesses would eventually drop their group coverage and let employees buy their own coverage in the exchanges. Though the jury may still be out, the most recent survey released by the Urban Institute found that 82% of employees are continuing to get their health insurance through their employer. Some of the primary reasons employers are sticking with group;
- Competition for Skilled Employees; Businesses use benefits attract and retain the best employees. Medical insurance is one of the most considered benefits in any compensation package.
- Tax Advantages; Group benefits provide significant tax benefits to both employers AND employees. Employers get a tax deduction for offering coverage and employees don’t have to pay taxes on the contributions employers make on their behalf.
- Superior benefits; When compared to skimmed-down individual plans offered through exchanges like Covered California, group plans offer larger PPO Networks and more comprehensive drug formularies. As an added incentive, insurers like Anthem and Blue Shield include the Blue Card Program in their group plans which give employees the freedom to seek out the best providers and hospitals around the country. Individual plans do not have this ‘out of state coverage’ except for life-threatening emergencies.
While most small employers will continue group in 2015, not every company will. Those not offering medical will still want to provide some benefits to remain competitive in the marketplace. Dental, Vision and Long-Term Disability insurance are very popular benefits that can be very affordable. Ask us for some quotes!