Here is the question: How much should my employees contribute to their insurance?
Let’s look at what the business needs to cover and have in place regarding employee insurance. Workers compensation is a form of employee insurance which is paid by them employer and required in just about every state.
In addition, there are some states which require disability insurance for employees. For both workers compensation insurance, and disability insurance, work with your licensed insurance professional to determine the requirements and coverage needed. Your state department of insurance is also a good resource.
As far as health insurance or major medical insurance is concerned, we are really talking about an employee benefits package. Generally, major medical insurance is offered with a combination of other types of insurance such as group dental, and group life insurance.
In our parent’s time, the business often paid for 75% to 100% of the employee benefits. That slowly evolved to about 75% -100% of the employee coverage and 0% to 100% for spouse and family coverage.
More recently, those percentages have been thrown out due to the general state of the economy and increased costs of insurance. You as the business owner need to determine what makes fiscal sense for the business. It may be time to look at supplemental insurance coverage for your employees as well. Generally, these supplemental insurance benefits are 100% paid by the employee but still can help bolster your benefits package.
There’s no doubt a good benefits package can help a business keep good employees. The amount you wish to consider having them contribute is a tough business decision you as the business owner are ultimately responsible to make.
Sit down with your licensed insurance professional and review what employee benefit packages are available and what is affordable and still allows the business to function profitably. There is no easy answer to this commonly asked question. Work with your licensed professional to determine the types of plans, deductibles, and options available.
If you belong to an industry association, check to see if group benefit packages may also be available, or perhaps discounts by carriers. Again, your licensed professional may be able to guide you through that process too.