Why Your Company Needs A Group Health Insurance Broker
Health insurance. For business owners, it’s a dreaded word packed with the anxiety of ever-increasing expenses and an annual parade of stressful plan comparisons.
But it’s a necessity.
For businesses with more than 50 employees, health insurance of some kind is a legal requirement. For smaller businesses, health insurance is more than just a perk; it’s a way to stand out in a competitive market while retaining your workforce.
As a team of full-service payroll professionals, we don’t offer health insurance ourselves, but we’ve certainly been around it long enough to understand it—and we’ve built valuable relationships with group health insurance brokers who have done outstanding work for our clients, especially around open enrollment.
We’re here to help as much as we can. Read our entire blog to learn about the state of health insurance benefits and why a broker might be valuable to you.
Challenges of Providing Health Insurance
If providing health insurance was easy and affordable, everyone would do it. Unfortunately, health care costs have spiraled out of control, and the federal government has tried to limit the health insurance industry’s volatility with time-intensive compliance.
Employer-sponsored health insurance has two major challenges at this point:
1. Health Insurance Costs Have Skyrocketed
We’ve all seen the trends: Every year, health insurance premiums increase, and employers and employees are left scrambling to find the best deal possible.
Costs have nearly doubled over the last 20 years. According to a 2021 Medical Expenditure Panel Survey from the Agency for Healthcare Research And Quality, the average total single premium for a private sector employee was:
- $4,386 in 2008
- $7,149 in 2020
That’s a 63% increase! If you had 10 employees in that time period, you would have paid $27,630 more per year in 2020 than in 2008.
The issue was even worse when a spouse was on the plan. In that same time period, the average total employee-plus-one premium in the private sector was:
- $8,535 in 2008
- $14,191 in 2020
That’s a 66% increase! For those same 10 employees in that same time period, you would have paid $56,560 more per year. And that’s only a portion of your overall benefits expenses.
Bottom line: Those constant price increases have placed greater financial pressure on employers, and many are now only paying a portion of the plan on the employee’s behalf.
2. The Rules Are Constantly Changing
Offering an employer-sponsored health insurance plan means keeping up with the ever-evolving parade of regulatory updates. Depending on your company’s location, size, and plan details, there could be dozens of updates to manage every year.
Those could include:
- IRS updates on HSA contributions
- IRS updates on FSA carryovers
- IRS updates on deductible thresholds
- COBRA updates
- Preventative care mandates (which impact what must be covered at no cost to the employees)
- ACA reporting requirements (including to Forms 1095-C and 1094-C)
- And more
Failure to comply could lead to hefty fines and penalties from regulatory bodies, employee complaints and attrition, and even bad PR throughout the industry or larger community.
Tip: If you’re worried about following the rules in general, but sure to check out our guide on federal and state payroll compliance!
Benefits of Providing Health Insurance
Despite the challenges of offering health insurance, there are perks to doing so. Some of the biggest advantages:
1. Employee Retention
Offering health insurance to your workforce can help you retain top talent—a serious benefit to your company that can keep you competitive within the market while avoiding the enormous costs of finding new employees.
Past research has shown employer-provided health insurance benefits can reduce turnover by 25%-54%, depending on plan size and details.
According to the SHRM, many employers estimate the total cost of bringing on a new hire is often 3-4 times the position’s salary! So, if you’re replacing an employee at $50,000, you could pay between $150,000-$200,000 finding the right hire and getting them up to speed in your company.
But offering a strong health benefits package can help you avoid those expenses.
2. ROI
Believe it or not, some research has indicated employers may actually experience a return on investment from offering health insurance—a result of a healthier workforce that’s less stressed over health concerns and more willing to stick around year after year.
Researchers from Avalere expect the ROI of offering health coverage to jump to a whopping 52% in 2026! In other words, for every $1.00 you invest in health insurance for your employees, you’ll see $1.52 in return.
And those returns make sense. Research from Washington University’s Olin Business School and Duke University finds employers who offer health benefits experience:
- Healthier and happier employees
- Greater employee retention
- Increased employee productivity
- Heightened employee innovation
- Improved company performance
Find the Best Health Benefits Options With A Group Health Insurance Broker
As our company name suggests, we specialize in Payroll, not health benefits.
But we do have fantastic partners we often refer our clients to. And one of our very favorite referral partners is a group health insurance broker who consistently helps our clients find the best options for their unique business and workforce.
If you’d like us to connect you, contact us!
3 Perks of Working With A Health Benefits Broker
Here are some of the biggest benefits we’ve seen for companies that partner with a broker:
1. Time Savings
Health insurance is complicated, and understanding the pros and cons of a single plan is an incredible challenge. With that in mind, comparing multiple plans at once is even more difficult!
Your broker is intimately familiar with the latest plans and vendors, and they can help you find the ideal plan faster than you’d be able to do by yourself.
2. Financial Savings
Your broker can help you save money in two major ways:
- Time – They’ll invest time searching for the right plan, not you. That allows you to continue generating revenue for your business.
- The Plan – A good broker will take the time to understand the needs of your company and deliver a plan that offers an appropriate level of coverage at the best price possible.
3. Options
Your job is to run your company. A broker’s job is to understand the health insurance market.
As a result, a good broker can tap you into a larger number of health insurance options. In Pittsburgh, for example, many companies default to UPMC or Highmark because they’re so well known, but there are many other options that can deliver great care at competitive prices!
Contact The Payroll Shoppe Team
If you need additional support, contact us! Although we’re not health care experts, our team knows plenty about payroll and payroll-specific topics, such as: