As a small business owner should I provide group insurance benefits?

There are no laws requiring the provision of health insurance or other benefits to employees. Even with Healthcare Reform you don’t necessarily as an employer have to provide the benefits instead you can opt to pay fines and let the employees get their benefits on the open market.  Of course the healthcare reform act is subject to what is decided by the Supreme Court this year.

Regardless of the laws involved, generally it is a good idea to offer your full time employees benefits in addition to cash compensation for their work. The key reason for this is the competitive market for good employees. In some industries there are actually shortages of employees period, let alone those who are good hard workers.  Not only do you want to attract employees in a competitive environment you want to retain them when they are producing results for your company.

Aside from direct cash compensation employee benefits are one of the recruiting and retention tools.  Many employees who have benefits in their current job would not consider leaving for a new job that does not include benefits, more specifically health insurance for the employees.  Because of this and likely the need to cover the owner’s own family health benefits offered as a group health plan benefit for the employees is one of the best benefits to employ.

From a health insurance perspective you can obtain better coverage as a group than as an individual. You can also secure guaranteed issue major medical coverage which short of going to the high cost risk pool is not an option in Texas. The cost of the risk pool makes coverage unaffordable for many with medical conditions.  Because in Texas a group is defined as 2+ who get paid by a common entity, yes you have to be able to provide evidence of employment for those being added to the group, even the smallest group can receive guaranteed issue coverage.

Just because coverage is guaranteed it does not mean rates can’t be adjusted based on age/sex/medical conditions suffered by the group. There are however limits about how much of an increase from the base rates (which are filed with the state department of insurance) can be adjusted for medical issues. Age and sex and work industry are standard rate modifications. 

You can add on dental, life, and even disability coverage to these groups. Depending on the size of the group you will have more options for additional add on specialty insurance products as well as more options for the dental coverage, life coverage, and disability coverage. Among the specialty products are cash benefit products for occurrences of cancer and other dreaded diseases. These help the employees both with and without disability benefits cope with the non-medical costs as well as deductibles etc., associated with seeking treatment for such a horrible disease.

We specialize in helping small business owners implement market competitive benefits packages to attract and retain good employees. Again, if you want to attract the best employees you should offer benefits in addition to just offering competitive wages.