Health insurance is health care that is provided by an employer. When a company provides health insurance benefits, they pay for all or part of the health insurance premiums for their employees. Employers are not required to provide health insurance coverage to employees as of yet. Health insurance is typically a matter of agreement between an employer and employees.
By definition, health insurance coverage is an employee welfare benefit plan established or maintained by an employer or by an employee organization like union, or both. They provide health care for participants and their dependents through insurance coverage or reimbursement.
There are certain employee benefits that are mandated by law. These include minimum wage, overtime, leave under the Family Medical Leave Act, unemployment, and workers compensation and disability. There are types of employee benefits available that employers are not required to offer to their employees. However, some do make the choice to provide them as well as an incentive.
Offering health insurance plans to potential employees is one way to gain a competitive advantage in recruiting star candidates. Here are four reasons why:
1.) Because group insurance plans often cost less per person than individual policies, employees effectively earn more when they receive health coverage instead of equivalent wages. The following comparison explain this advantage:
- Employee "A" is paid $37,000/year and has to purchase individual coverage at $600 per month.
- Employee "B" is paid $31,000/year and receives group health insurance that the employer pays $500/month for.
Both individuals cost the employer the same amount, but employee "A" has $1,200 dollars less yearly income after health insurance costs. Keep in mind that the extent and availability of this advantage varies depending upon the membership and group size.
2.) Most employment candidates find it more convenient and affordable to receive health coverage through their employer, rather than having to look for a suitable individual insurer. It is also easier to become covered by a group insurer; applications for individual insurance are at a higher risk rate to be rejected.
3.)Great health insurance plans can not only be helpful in recruiting star candidates, but in retaining them as well. People remain less likely to leave a job if it provides good health coverage. Another advantage is that companies save time/money on training and recruiting when employees stay longer.
4.) When potential employment candidates read in recruiting advertisements that medical coverage is included, they will feel that the position in question is considered important by the employer. Candidates also will not worry about finding an individual insurer and getting accepted. Each of these factors add up to give your organization or business a competitive advantage in recruiting star candidates, compared to companies which do not offer employee health coverage plans.
