Offering group health and life insurance benefits to employees is optional for most employers. But these benefits do serve a very critical purpose for most employees and can mean the difference between a healthy, dynamic workforce and a workforce that is unhealthy and disengaged.

Businesses need to carefully consider whether or not they will offer certain benefits to employees, and there are a variety of pros and cons.

Pros:

• Employee benefits are an important part of an employee compensation plan.
• Employees might accept better benefits in lieu of higher salaries.
• Employee benefits help businesses stay competitive and attract and retain top talent.
• Employers receive tax breaks for the contributions they make to employee benefits plans.
• Employers can utilize group purchasing power for employee benefits, yielding lower costs for everyone.
• Group health plans and related benefits encourage wellness and often reward employees for leading healthy lifestyles.
• Employee benefits have been shown to decrease employee absenteeism and improve morale.

Cons:

• The cost of providing employee benefits can be significant.
• Cost sharing with employees can cause tensions and misunderstandings.
• Administrative hassles increase as you offer more employee benefits.
• Employee benefits costs for small businesses are higher than for large businesses.
• Cost can change dramatically from year to year (especially for group health insurance), making financial planning difficult.
• Changes and uncertainties surrounding the Affordable Care Act are making year-to-year planning difficult.
• Mistakes or malpractice in administering plans can lead to lawsuits or regulatory fines.

Group Health Insurance Considerations

Health insurance has always been the most desired employee benefit, but the recent healthcare legislation has brought a wealth of confusion and uncertainty to the entire system. The “employer mandate” has been delayed until 2015, but employers of all sizes still need to plan for compliance with the law’s myriad new requirements. The employer mandate requires employers with 50 or more full-time employees (or a combination of 50 or more full- and part-time employees that is equivalent to 50 full-time employees) to offer health coverage or be subject to a penalty/tax if their employees are receiving subsidies for purchasing individual health insurance from the health insurance marketplace. Other new taxes, regulations, fees, and requirements apply to employers of all sizes.

Group Life Insurance Considerations

Group life insurance is beneficial for employees because they can obtain coverage for a better price as part of the group than they could on their own. If you want to offer life insurance as an employee benefit, you need to determine who will be covered, what type of life insurance benefits to offer, and how much insurance is optimal and affordable.

Group term life insurance can be offered to all full-time employees, to certain classifications of employees, or to a few key employees, but careful consideration must be made under all of these arrangements to make sure that plans are properly administered and that all non-discrimination rules are followed.

Group term life insurance can be offered in various amounts, and the type of plan you offer and who you offer it to will affect the tax implications for your business.

Tidwell Insurance Agency can answer all of your questions about group health and life insurance. We can help you put together a comprehensive employee benefits program that will please your employees and help you create a loyal, healthy workforce. Contact us today to learn about the types of plans we offer and how we can help you meet your business objectives.