Employee Healthcare Benefits: How Much Do They Matter?With the open enrollment period for the new healthcare marketplace under ‘Obamacare’ creeping up fast, employees and employers everywhere seem to be growing increasingly frenzied over the issues surrounding the controversy. Open enrollment begins October 1, 2013, and with less than a month to figure out who should enroll, who must enroll, and who will pay the price for not enrolling, everyone, from CEOs to servers and bartenders, wants to know: how will this affect me?
The answer to this question is certainly not black and white. When there’s this much gray area to a given issue, the truth is, there is no easy answer. But, does that mean you shouldn’t concern yourself? Absolutely not. Now, more than ever, it’s important for every individual to consider what healthcare means to them.
If you’re an employer, you may only see employee healthcare benefits as a cost to you and your business. But, if you’re an employee, healthcare benefits can mean the difference between sickness and health for you and your family, and there’s a big difference between the two.
Healthcare Benefits Aren’t JUST For Employees
Dr. John Sullivan, a well-known author on the subject of talent management, recently had this to say in a blog article on the subject of employee benefits:
“Many of the arguments that I hear about employers having to offer health care benefits are shortsighted. Some of these negative positions are obviously influenced by politics, while other negative positions seem to be focused exclusively on the cost side of the equation.”
The ‘cost side of the equation’ is important to many employers, and that’s perfectly understandable.
However, Sullivan goes on to say, “A smarter approach is to instead work with HR and the CFO to calculate the direct economic benefits that come from the resulting increase in productivity, lower absenteeism, longer retention, and dramatically improved recruiting.”
What are these ‘direct economic benefits’ to which Sullivan is referring? The items he mentions are a direct result of offering your employees worthwhile healthcare benefits.
There are many reasons, ethical and otherwise, for corporations and small businesses alike to offer their employees health insurance. Let’s look at some of the top ways that businesses can benefit from offering their employees insurance.
Top 5 Ways Your Business Can Benefit From Employee Benefits
- Sick workers are less productive: Whether or not you empathize with your employees in their desire for affordable health insurance, you can certainly see the benefit of employees taking less sick days and missing less days of work. Healthy workers tend to work a lot harder (understandably) than sick workers.
- Employee retention may suffer: Companies who can’t avoid offering healthcare benefits to employees may end up having an advantage over companies who manage to find a way around the new law. With so many businesses now mandated to offer those benefits, top talent is almost guaranteed to want to look elsewhere for a position that has said benefits.
- Recruiting new talent becomes more difficult: With employee healthcare benefits on the upswing in so many companies, recruiting new talent will become decidedly more difficult if your company does not offer that which so many other companies do.
- Healthcare matters to your workforce: If your employees have families or health issues that requires they regularly see a doctor, they are much more likely to look for work elsewhere if your company does not offer health benefits. Can you afford to lose top-notch employees because of this?
- Level the playing field: If you decide not to offer healthcare benefits to your employees, don’t be surprised if lower-paid employees begin to become frustrated with their wages or salaries. If your argument for not offering benefits is the ‘cost,’ your lower-paid employees may begin to wonder why they aren’t valued as individuals within your company.
At the end of the day, when calculating the “direct economic benefits” that come from offering employee health benefits, it’s important to remember the point that Sullivan ends his article with:
“You will invariably learn what every Fortune 500 firm has known for decades. And that is that the many benefits of healthcare and wellness offerings by far exceed any potential costs!”
Avoid Errors and Consider the Pros & Cons
Inevitably, making errors when it comes to offering employee benefits can really cost you. This is one area you should pay special attention to when it comes to cost. If you’re doing the right thing by your company and your employees (and the law!) by offering health benefits, make sure you’re not ‘ponying up’ extra dough when you do offer those crucial benefits.
Some of the most expensive errors you can make when it comes to offering employee healthcare benefits are mistakes like covering the entire cost of employee benefits, covering people who aren’t actual employees, turning in sloppy paperwork or administrative oversight, failing to inform employees what their benefits cost, and providing unnecessary benefits.
On that note, consider the pros and cons of offering employee healthcare benefits.
Pros like attracting and retaining top talent, gaining tax advantages, and ensuring the wellness and morale of your workers is likely to outweigh cons like costs, administrative issues and potential liability that you might (however unlikely) face.
Whether or not your company will be required by law to offer health benefits under the Patient Protection and Affordable Care Act, can you or your company afford not to do so when it may cost you your top talent?
Image via Shutterstock
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