In today’s job market, offering group health and dental benefits is a surefire way to attract highly talented job applicants. Indeed, the benefit itself is a far more attractive option than a commensurate boost in salary. Depending on how structured, group health insurance plans are often the linchpin for employers seeking to retain employees. What’s the appeal?
Group Policies and the Scope of Coverage
With group insurance plans, the average employer will pay at least half of the employee’s monthly premium (on average, that’s $1500 per month for an employee). Fortunately, those premium payments are fully tax deductible. Nonetheless, they are an expensive benefit for employers – and getting more so. Given rapidly rising premiums, employees recognize this fact and more likely than ever to value such cost-saving group plans. Forty-six percent of all respondents agree that health benefits were an important factor in their decision to work for their employer.
Aside from lower premiums, group health insurance plans are more comprehensive and generally have lower deductibles. Indeed, employees who strike out on their own are often surprised at their limited options within the individual market. A recent Monster.com survey found that a healthcare “was the most valued class of benefits, accounting for almost one-third of the value prospective employees would place on a benefits package.” It’s this sense of security and peace of mind that helps employers with employee retention.
Employers have a tremendous range of group health plan options at their disposal: HMOs, PPOs, Point-Of-Service Plans, High-Deductible Health Plans. Likewise, employers have the option of offering fully or partially funded dental care insurance plans as well.
Why Employee Retention Is Important
While employers may begrudge premiums, retaining valued employees saves them time and money. Simply put, employers who fail to offer benefits risk dealing with high-employee turnover. For those that do, the constant influx of new people means lost skills, time spent interviewing, and significant training costs necessary to bring new hires up to speed.
In contrast, employers who retain their long-term employees benefit from greater productivity, satisfied coworkers, and higher sales. Moreover, such employees are appreciative – and consequently more loyal – to their employer as a result (for employers that offer such benefits, the number of employees planning to stay with their employer is rising).
For today’s knowledge economy, employers who offer group health insurance plans are providing their organization with long-term security necessary to remain competitive. Companies that don’t are sacrificing such long-term gains for short-term (and perhaps illusory) savings.