Whether as an employer or employee, employee health benefits are an important part of the employment package. They are a range of health and medical plans that cover most types of care offered to employed persons.
Types of health benefits
Each type of benefits comes with its their own advantages or disadvantages, and it is better to negotiate the plan from the beginning.
Group Health Insurance:
– also known as “employer-sponsored” benefits, it covers all employees together with their family members.
– usually uniform, meaning it offers the same benefits to all employees or members of the group, without distinction.
– unlike the individual health care plan, the group one is purchased by an individual or family member indirectly through the person’s employer.
– it depends on the individual’s employment.
Defined Contributed Health Plan:
– it is a personalized health plan which allows employers to fix the costs monthly by establishing a defined benefit plan instead than playing for a specific group health insurance plan.
– they are an alternative to the group health insurance plan and it consists more of a tax-free allowance offered to the employees to spend on their own personal policies or specific medical expenses.
Advantages to offering an insurance plan
Employers are interested in having an optimal insurance plan, which should be a right balance of some key features:
retention of personnel: as the health insurance plan is a key component in the compensation package for an employee, it may be used as a significant tool in personnel retention, especially correlated with other factors, such as the demographics of the workforce in the particular geographic area.
tax deductions: by offering a traditional package or an alternative one such as the defined contribution health plan, the business may gain tax advantages for their contribution through the increase of the overall compensation package.
employee well-being: last, but not least, one of the most important benefits of an insurance plan is that it ensures the well-being of the employees. In the long run, it is a preventive action that saves the business from paying extended periods of sick leave, and allowing the business to be more profitable.
Types of packages
Health care is continuously under reform, but one of the most basic arrangements are divided into:
Individual mandate: where an employee is required to get a minimum essential coverage for themselves and their families;
Employer mandate: where medium and large employers (+50 employees) are required to obtain minimum essential coverage for their employees, or pay a fine;
Health insurance exchanges: under this arrangement, tax credits and tax subsidies are offered where all plans become guaranteed-issue.
