Do you need a Health Insurance Plan for Your Small Business?

Starting your own business is no easy feat, so it isn’t hard to see why you’d avoid buying health insurance for your employees. Several American startups rely on independent contractors because they allow business owners to cut costs on insurance, hiring, and office space. 

Other countries, like Australia, don’t need to buy health insurance, as Medicare already covers the bulk of their medical needs. However, there are many reasons why American and Australian business owners should offer private insurance from a list of Health Funds, regardless of size.

Are You Required by Law to Offer Health Insurance?

Most countries operate using two health care models: The National Health Insurance Model and The Private Insurance System. We’ll discuss the legality and needs of both systems.

The National Health Insurance Model

The National Health Insurance Model, found in Canada, Australia, and the United Kingdom, combines the Beveridge and Bismarck model. They’re comprehensive, government-controlled, and citizens can choose their doctors, surgeons, and hospitals under this model.

In these countries, health care is paid through higher taxation for the majority of the nation’s healthcare needs, but private insurance can be purchased to cover the rest. Some countries, like Australia, offer incentives to buy into private insurance, like access to private hospitals.

While countries who use this model don’t need to offer private insurance, regardless of how large they become, business owners may want to do so as a perk to attract new hires.

The Private Insurance System

The Private Insurance System is the health care system that the majority of the United States is covered by. In this system, citizens are either covered by their employers or by a private policy the policyholder purchases. 

However, health insurance is so expensive for most citizens that many of them go without any coverage. Therefore, citizens often need to get insurance through their employers.

Under the Affordable Care Act (in the United States), small businesses with fewer than 50 employees are not required to offer health insurance benefits to their employees. However, potential employees will avoid applying for job opportunities in your company without it.

Why Should Small Business Owners Offer Health Insurance?

In both systems, employees are more likely to apply for jobs that offer health insurance as a benefit. However, there’s a big difference between an American and an Australian company offering health insurance. For Americans, it’s a necessity. For Australians, it’s an add-on.

Americans: The Necessity of Health Insurance

Americans need health insurance to avoid the high costs associated with seeing a doctor. On average, it costs $300-$600 depending on the services and treatment needed, meaning citizens will avoid seeing the doctor and won’t take preventative care measures due to this cost. 

While health insurance will come at a high cost for the business, it’ll save money on hiring, onboarding, training, and expenses associated with a high employee turnover rate.

Small businesses in America will receive the following benefits by offering health coverage:

  • Lower premiums on group plans
  • Tax incentives
  • Improved hiring and recruiting
  • Employee loyalty and retention
  • Increased job satisfaction
  • Healthier, more productive employees
  • Improved company culture
  • Pre-tax benefits for employees

Australians: Health Insurance as an Incentive

Australians receive all of the benefits offered by American health insurance from government-mandated Medicare, but they also receive shorter wait times and the ability to choose their doctors. Although Australian Medicare is good enough as it is, private health insurance can offer much more to individuals for a reasonable price. These benefits include:

  • Private hospital rooms
  • Insurance claims
  • Full dental coverage
  • The ability to select your surgeon 
  • Cheaper lifetime health insurance premiums

Whether you live in a country that offers universal health coverage or private health insurance, small businesses will benefit from receiving a larger volume of quality potential employees.

Adam Hansen