Skip all navigation and go to page content
HealthInsurance.Alabama.Gov
Welcome to HealthInsurance.Alabama.Gov  Top Navigation Feedback Home Page Contact Us About Us Search the Alabama website
EMPLOYERS
 Small-Sized Business Employer
(2-50 employees)
 Medium-Sized Business Employer
(51-250 employees)
 Large-Sized Business Employer
(250 or more employees)
INDIVIDUALS & FAMILIES
 START HERE - What Health Insurance is Right for Me?
 Self-Employed
 Employed & Uninsured
 Unemployed & Uninsured
 College Student
 Recent College or High School Graduate
 Uninsured Children
 Transitioning to Retirement
 Maximizing Your Healthcare Coverage
 AHIP and COBRA
 Finding a Health Plan and Policy
RESOURCES
 Alabama Health Plans
 Small Employer Resources
 National Business Groups & Associations
 Low- or No-Cost Health Insurance Programs
 Consumer Health Insurance Information
HELPFUL WEB TOOLS
 Glossary
 Tax Savings Benefits Calculator for Employees
 Tipsheets

Small-Sized and Medium-Sized Business Employers

Small business employers

Important Facts About Health Insurance

In addition to giving employees access to affordable health services, purchasing group coverage helps business in other ways such as tax benefits, increased employee productivity and morale, and reduced turnover. Consider the following:

  • There are tax benefits when you provide health insurance for your employees:
    • Health insurance premiums that your company pays are fully tax deductible as a business expense and are non-taxable income for employees. These tax deductions may be thought of as a discount to the cost of the health insurance.
    • Health insurance payments are excluded from base payroll when calculating an employer's Medicare and Social Security payments. An equivalent amount paid in wages would be subject to Medicare and Social Security taxes.
    • Employees may make their premium contributions on a pre-tax basis through payroll deductions, which makes coverage more affordable for workers.
    • Alternative health benefit savings plans, such as health savings accounts (HSAs) and health reimbursement arrangements (HRAs), have added tax savings for employers and employees.
  • Offering health insurance may help employers:
    • Recruit high-quality workers.
    • Reduce staff turnover.
    • Reduce the cost of absenteeism.
    • Limit disability and workers compensation claims.
  • Frequently health insurance costs are reduced when the employer buys a group plan rather an individual ones.
  • Health insurance coverage gives businesses access to the price reductions that health insurance companies negotiate with health care providers.
  • Even if an employee or dependent is in poor health, federal law prohibits insurers from denying coverage to the company, the employee, or the dependent based on health status. However, the cost of the insurance could be higher.
  • Besides the health benefits to employees that come with better access to care, health coverage also means the costs for services will be more manageable. Employees with health coverage are protected from financially burdensome debts arising from major illnesses or injuries. Costs associated with these medical expenses often exceed what most people can afford or want to pay.
 Alabama's ALL Kids offers a low-cost, comprehensive health care coverage for children under age 19 who are in eligible lower-income working families.

 


Back to top

 

Skip bottom navigation and go back to content

Home | Contact Us | About Us | Search | Health Benefits Tax Savings Calculator for Employees
What Health Insurance is Right for Me | Employers | Individuals/Families | Resources

Disclaimer
Copyright © 2006-2007 HealthInsurance.Alabama.Gov ®. All rights reserved.