Many small businesses and startups find are always looking for ways to keep costs low, especially until they become more established as a company. One of the expenses that are often overlooked is high-quality insurance for employees. While cutting costs on insurance can save a significant amount of money annually, it can be more expensive and risky in the long run.
Are Businesses Required To Provide Insurance?
Ideally, every business would provide insurance for their employees, and in turn, all employees would have more than adequate high-quality coverage for themselves and their families. In reality, many small and startup businesses don’t have a budget for insurance. Most of the time, it’s not that the businesses don’t want to provide insurance; they simply think that they can’t.
Businesses with fewer than 50 full-time employees are not required to offer healthcare to their employers. While this is good news to startups or small businesses that are trying to cut some financial corners, there are a few reasons why businesses with less than 50 employees may still want to offer insurance.
- Small Business Health Tax Credit: Businesses that provide coverage may qualify for a tax credit that is equal to 50 percent of premiums.
- High-Quality and Long-Term Employees: Businesses that offer insurance are more likely to have qualified employees who will stay with the company long term.
- Happier and More Productive Workplace: Research reveals that employees who feel cared for and valued in the workplace are more likely to be loyal employees. Employees with insurance are also happier and more productive at work.
- Offering Insurance May Help Your Cut Other Costs: Some employees would rather have insurance coverage than a higher salary. Depending on your business and your budget, it may be more cost-effective to offer insurance than offering a higher salary.
Protecting Employees With Workers’ Comp Insurance
While small businesses have the option to provide health insurance to their employees, workers’ compensation insurance is not an option. Workers’ comp insurance is designed to protect employees in the event that an on-the-job injury occurs.
If an employee is hurt at work, their injury or illness may qualify for benefits that cover the cost of care and missed days of work. Whether you have two employees or 20, it’s essential to have workers’ comp in place.
While many business owners assume that the insurance is only designed to benefit injured employees, it can also protect you as a small business owner. Even though dealing with workers’ comp claims may be time-consuming and stressful, the insurance can prevent you from being sued by an employee who is injured at work. Workers’ comp insurance is more cost-effective than facing legal fees in a claim against you from an employee.
Choosing Insurance For Your Business
Selecting insurance for your employees may be a bit daunting. Working with an insurance broker can be helpful, but be sure to work with someone who specializes in small business plans. Working with a workers’ comp attorney can also help you understand the benefits and everything you need to know to protect your business and your employees.
Never select an insurance plan “just to get it over with.” Taking the time to do your research and picking a plan that benefits you and your employees will be well worth the work and time in the long run. Here are some things to consider when shopping around for insurance:
- What is the coverage?
- What is the health care provider network?
- What are the premiums, deductibles, and copays?
- Do your employees have choices?
- Which benefits are essential?
When in doubt, ask fellow startup business owners to see what kind of insurance they provide to their employees. You may also want to take time and talk to your employees about what type of insurance they want and how much they are willing to pay on their own.