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Group Benefits for Small Business: What You Need To Know

Small businesses must work to tight budgets if they want to remain competitive.

Getting costs down, however, can be a challenge, especially if you pay for all employee benefits, such as health, life, dental, vision, and disability insurance, individually.

Fortunately, group benefits for small business offer a way for small-time entrepreneurs to reduce the cost of providing perks.

But what are group benefits? And how can they help you control costs? Continue reading to find out.

Group Benefits For Small Businesses

Many employers offer their employees health care benefits to stay competitive.

Unfortunately, doling these out can be expensive, especially if you run a small business.

Group benefits, however, are a powerful mechanism that allows you to save money on things like health, life, and dental insurance while providing employees with higher-quality cover.

Instead of paying each employee’s insurance premium individually, you enroll them onto your company group scheme.

Here you pay one premium for all employees instead of separately, cutting the risk to the insurer and, therefore, lowering the cost to you.

Group benefits give you lower premiums and provide better coverage than if you offered cover individually with every employment contract that you sign.

How To Qualify For Group Benefits

Qualifying for group benefits for small business depends on the specific type of benefit that you offer.

Health Insurance

Companies that have more than one but less than fifty full-time employees are eligible for group health insurance.

Most small businesses fit into this category.

If you have more employees than this, you must apply for large group cover and meet specific reporting requirements.

To qualify for small group health insurance, you’ll need to prove that you have business premises in the state in which you apply, such as your offices or retail unit.

Life Insurance

Group life insurance is a product that allows you to offer life insurance to eligible employees at a discount from standard, individual fees.

Group life insurance policies are available to companies with two or more employees.

The per-worker cost declines the more employees you enroll.

Most employers offer payouts that are a set multiple of the employee’s annual salary.

Disability Insurance

Many employers offer disability insurance as a means to protect employees in the event that they experience a disability.

Group disability insurance, however, only applies while the worker stays with the firm.

If they switch companies, they lose their benefits.

You can apply for a group disability insurance once you enroll two or more employees on a disability insurance scheme.

Vision Insurance

Vision insurance usually covers the cost of eye exams and some of the cost of glasses or contact lenses.

You do not have to provide vision insurance by law.

Some companies meet the full cost of the insurance out of pocket, while others deduct a proportion of it from staff wages.

Dental Insurance

Dental insurance fits into three categories: preventive, basic, and major.

The amount that an employee must contribute to the dental services they receive depends on the classification.

Regular check-ups, for instance, count as preventing care, and most insurers will cover 100 percent of the costs.

For basic services, like fillings, insurers may pick up 80 percent of the tab, while the employee pays the remaining 20.

Companies with two or more employees can enroll in group dental insurance to bring individual premiums down.

Benefits Of Group Benefits

Here are some benefits of choosing a group benefits for small business plan for your enterprise:

Lower Your Costs

Paying insurance premiums individually gets expensive, especially once you start to grow your business.

If you decide to go down the individual route, insurers will demand that you pay the full market rate.

The reasons for this are pretty straightforward: when you insure one employee at a time, the insurer faces a higher risk.

When an employee on a solo plan gets sick, the insurer cannot use premiums from other employees to cover the cost of care.

Group insurance policies, however, get around this problem.

The marginal risk of adding another person goes down with each employee you enroll.

Thus, while an individual employee might fall sick at any time, it’s unlikely that the whole group will.

Improve Staff Retention

Voluntary benefits are becoming more popular.

Data from SHRM suggest that more than 65 percent of employers offer these perks to their workers to improve employee retention.

Over 79 provided voluntary benefits to “enrich existing core benefits by offering more personalized options.”

Employee retention is a significant priority for businesses.

Finding and training new workers is expensive and something that many want to avoid.

High-value group insurance benefits help dissuade employees looking for better employment options.

Improve The Company’s Reputation

The general public celebrates companies that look after their employees.

The business media, for instance, regularly reports on the top 100 employers, promoting firms that provide their workers with excellent conditions.

Providing specific benefits often has a more significant impact on your reputation than directly paying workers more.

A company that pays workers a salary of $50,000 plus life, health, vision, and dental insurance is likely to have a more favorable reputation than one that pays $80,000 but offers no benefits whatever.

Make It Easier To Acquire Talent

Talented workers are rare. Acquiring them, therefore, is a challenge.

Research suggests, however, that workers prefer employers who provide benefits compared to higher salaries.

The 2018 Global Talent Trends survey, for instance, found that one in two employees want to see a greater focus on health and wellbeing at their place of work.

Furthermore, 88 percent of job seekers said that they would take health, dental, and vision insurance into consideration when applying for a role.

Health insurance is a higher priority than either vacation time or jobs with work-from-home options.

Conclusion

Group benefits for small business are, therefore, a vital tool that your business can use to become more competitive.

Not only do they allow you to cut the cost of providing staff with employment perks, but they also help attract new talent.

Not all businesses, however, are taking full advantage of the opportunities presented by group insurance benefits. Make sure that you don’t miss out.