Before deciding whether to provide health coverage as an employee benefit, review these practical guidelines from small-business experts.
For an overview of plan types and related dental options, see Understanding Health and Dental Insurance Options.
Guidelines for small businesses
- Consider the nature of your business. Professional firms that compete for skilled workers—such as medical, legal, or technical practices—are likelier to find it financially sensible to offer group health benefits, while small retail or service businesses with largely entry-level staff may choose not to.
- Keep in mind what your employees want. Employees who need regular coverage often prefer employer-sponsored plans for convenience and predictability, while others may prefer individual coverage through a marketplace.
- Remember tax incentives. Smaller employers with low-wage employees may qualify for federal tax credits or other incentives that help offset the cost of providing health benefits.
- Consider subsidized individual coverage. Some employees may be eligible for premium assistance through an individual marketplace, so offering group coverage is not always the best financial option for every worker.
If you’d like, we can review these factors in the context of your business and give a recommendation tailored to your situation.
For more information tailored to employers, see Major Medical Health Insurance for Businesses, or talk to an agent about your options.
Frequently Asked Questions
How do I decide whether to offer group health insurance?
Compare your hiring needs, employee demographics, budget, and available tax incentives to determine if group coverage is the best fit.
Can small employers get financial help to offer coverage?
Some small employers may qualify for tax credits or other programs that offset premium costs; eligibility depends on factors like business size and employee wages.
Should employees buy coverage on the individual marketplace instead of through work?
That depends on each employee’s household income, subsidy eligibility, and the value of the employer’s plan compared with marketplace options.
Will offering coverage help my business attract better candidates?
Yes—health benefits are often an important factor for skilled candidates and can improve recruitment and retention.