I get asked all the time why I think having a Group Health Plan is better than just giving the employees money and letting them pick their own plan somewhere else. My response is….maybe you should! There are definite benefits to having a Group Health Insurance plan, but some employers think it’s easier to just give them some extra money and call it a day. The benefits of a Group Health Plan include, more options. With a Group Health Insurance plan, there are many more options than with personal or Individual-Family Health Plans. The pricing is about the same, but with a Group Health Insurance Plan, any money that employees pay is tax free, so it costs them less. By having a Group Health Plan, it lowers your FICA and Workers Comp rates. There is also a tax benefit to having a Group Health Insurance plan too. It’s usually a huge deduction.
Tax Benefits to having a Group Health Plan
There are tax benefits to having a Group Health Insurance plan by the way of deductions. The CA Health Exchange, or Covered CA, have incentives to having your Group Health Plan with them too. They are offering tax credits of up to 50%. The drawback to that is that sometimes to “qualify” for the tax credits can be challenging. Trying to figure out the tax benefits can be difficult too. I always defer to a tax professional for that type of advice. I will tell you that I’ve had several companies think they would qualify for the tax credits and then found out later that they did not. Any Health Insurance you get, whether its a Group Health Plan or a Family Plan, is going to be expensive. There’s just no way around it.
There are ways to mitigate some of the cost of Group Health Plans
Some companies (mine included), have decided to offer an alternative to the high cost of the richer Group Health Insurance Plans. The alternative involves using other quality insurance products that help employees insure their deductibles. That way, employees can choose a lesser expensive Group Health Plan and then underfund the deductible when you have an unexpected accident or hospital stay that can cost you thousands of dollars. The products are very cheap and give Group Health Insurance folks great protection. Brauer Insurance specializes in not only Group Health Plans, but alternative methods of insuring employees with Group Health Insurance. (408) 421-5555