Medical Insurance Benefits for Employees

Securing affordable, quality health insurance for your employees is crucial for attracting top talent and retaining satisfied staff. Yet employer-sponsored health coverage comes with many questions, from what your obligations are to keeping costs sustainable. At Conner Insurance, we understand the complexity around providing company health benefits. As a mission-driven organization that values the relationships we build with our customers, our consultative advisors become your partner in navigating the difficult medical coverage landscape. Below, we'll explain everything you should know about obtaining medical insurance for your employees.

Are Companies Legally Required to Provide Health Insurance for Employees?

The Affordable Care Act (ACA) requires companies with 50 or more full-time equivalent employees to offer affordable health coverage to 95% of their full-time employees. If employers don't provide any coverage or offer coverage that doesn't meet the ACA's standards for affordability or minimum value, they can be penalized. These penalties only occur if at least one employee is eligible for premium tax credits in the Marketplace.

Full-time employees are those working at least 30 hours per week. However, most small and midsize companies still choose to offer health benefits to ensure they can attract and retain top talent. With rising insurance premiums, obtaining affordable yet quality coverage remains a key consideration — one that our advisors can expertly assist with.

Why Should Employers Offer Health Care Benefits?

While some businesses only provide health coverage to meet legal obligations, offering medical benefits serves several strategic purposes beyond compliance:

  • Getting Tax Benefits: Companies that establish Section 125 plans not only gain tax deductions on insurance premiums but also allow employees to pay their share of premium costs pre-tax. This structure benefits both employers and staff.
  • Improving Employee Retention and Satisfaction: Comprehensive medical coverage demonstrates an investment in employee wellbeing. A satisfied team stays with an organization longer on average while also exhibiting higher engagement at work. Health insurance remains one of the most desired employee benefits across countless surveys.
  • Attracting Quality Candidates: Similarly, generous health benefits signal a business is a good place to work, making it stand out amid the competition when vying to attract top talent. Prospective staffers almost always inquire about health insurance offerings during interviews. A strong benefits package makes hiring easier in a tight labor market.
  • Avoiding Employer Shared Responsibility Payments: Companies with at least 50 full-time employees face potential tax penalties — $2,880 to $4,320 per employee annually, as of 2023 — if coverage they offer fails federal standards for affordability and minimum value. Avoid these substantial shared responsibility payments with compliant health plans.
  • Creating a Healthy Workforce: While not always the initial motivator for companies to offer health insurance, the byproduct of quality medical coverage is a healthier workforce with fewer absences. With fewer significant health complications, morale and productivity improve, benefiting both your team and bottom line.

Related: Enhance Employee Health Benefits

How Do Company Sponsored Health Insurance Plans Work?

Providing health coverage as an employer means structuring and selecting an insurance plan type, enrolling staff members, and assisting them with understanding available medical benefits. This involves important considerations.

What Are Group Insurance Plans?

Because obtaining health insurance as an individual consumer can be cost prohibitive, employers provide coverage through group plans at more affordable group rates. For small companies unable to afford group plans on their own, association health plans are an option, allowing multiple companies to band together to reach required membership thresholds for discounted insurance.

Related: Explore Comprehensive Health Coverage

What Are the Most Common Funding Mechanisms?

When providing employee health benefits, business owners must also consider how to fund their selected insurance plans. Conner Insurance specializes in structuring the following funding arrangements based on each client's unique needs, priorities, and budget:

  • Fully-Insured Plans: In this traditional model, the employer pays a fixed monthly premium to an insurance carrier, which then pays out employee claims and manages plan benefits. At the end of the plan year, the employer faces a potential renewal rate increase based on the past year's claims experience.
  • Self-Insured Plans: With a self-insured plan, employers pay for claims pay for claims as they occur, while partnering with a third-party administrator to manage the plan. Employers can limit their financial risk by purchasing stop-loss insurance, which reimburses them for claims that exceed a predetermined amount.
  • Individual Coverage Health Reimbursement Arrangement (ICHRA): An ICHRA is an employer-funded health benefit that reimburses employees for their individual health insurance premiums and other qualified medical expenses. This arrangement allows employers to offer health benefits without managing a traditional group health plan, providing flexibility for both the employer and employees.

At Conner Insurance, our expert advisors work closely with each client to evaluate these options and determine the optimal funding strategy for their employee health plan.

What Do Medical Benefits Include?

Most employer health plans include features like:

  • Preventive and routine health services
  • Prescription drugs
  • Hospital and ambulatory patient services
  • Laboratory work
  • Maternity and newborn care
  • Chronic disease management
  • Emergency services

Keep in mind additional offerings such as dental and vision care and mental health benefits. While not mandatory, these health care benefits are highly desired by today's workforce. These coverage extensions require added premium costs.

Related: Streamlined Employee Benefits Management

How Can Companies Keep Employee Medical Insurance Costs Low?

With rising healthcare costs every year, what can organizations do to keep health coverage affordable yet adequate enough to help and retain staff? The first step is partnering with an experienced, relationship-focused benefits advisor like Conner Insurance. We become an extension of your team to understand your priorities and constraints in order to develop the best strategy.

By taking advantage of exclusive group purchasing arrangements, avoiding unnecessary benefit overlaps, exploring innovative cost structures, and optimizing enrollment, smart customization of coverage by our experts can yield substantial savings while giving your employees a plan they’ll appreciate.

Related: Affordable Health Options for SMEs

Partner With Conner Insurance for an Affordable Medical Insurance Solution

As a faith-based, family-owned company for over 70 years, we at Conner Insurance are profoundly committed to improving healthcare access. We understand the importance of balancing robust employee coverage with sustainable growth for our small business partners, including manufacturers and blue collar industry organizations across numerous sectors.

With deep experience in the benefits space, Conner Insurance has distinct advantages as a provider, including:

  • Multiple innovative cost structures like self-insured, captive solutions, and level funded to fit unique budgets
  • Consultative approach focused on strategic education versus just quoting plans
  • Creative prescription strategies for maximized savings
  • Mission driven with client culture alignment
  • Implementation of specialized platforms like personalized support, wellness programs, and population health management
  • Highly responsive, relationship-focused service model

Together, we can ensure your employees gain access to quality, affordable healthcare while supporting the ongoing success of your company. Protect your team with benefit plans tailored to your unique organizational needs.

Get in touch with us to learn more

Frequently Asked Questions

What medical insurance benefits are typically available to employees?

Medical insurance benefits provided to employees typically include coverage for a range of healthcare services such as doctor visits, hospital stays, surgeries, and prescription medications. These benefits often extend to preventive care, mental health services, and sometimes dental and vision care. Additionally, many plans offer access to telehealth options, wellness programs, and health savings accounts (HSAs) or flexible spending accounts (FSAs) to help manage out-of-pocket costs.

Why is health insurance an important employee benefit?

Health insurance is an important employee benefit because it provides financial protection in case of medical emergencies, illnesses, or injuries, ensuring employees can access necessary healthcare without facing prohibitive costs.

Do insurance companies negotiate lower employee healthcare rates?

Yes, one key advantage of partnering with an insurance provider like Conner is access to discounted group plan rates negotiated by the carrier with care networks and drug companies, as well as utilization management support. Experience with strategic budgeting also allows a partner like Conner to provide very competitive bid pricing. Our priority is maximizing the benefits and care your employees will utilize so providing affordable premium rates is paramount to our shared success.

Does providing good health insurance help with employee retention?

Without question, generous medical benefits can help reduce turnover rates and improve job satisfaction and productivity. It demonstrates a commitment to the well-being and financial security of your employees. Supporting overall worker health and financial safety also helps attract and maintain a thriving workforce.

2017 Healthiest Employers