The Australian workforce is changing, and employers now need to offer a comprehensive employee benefit package not only to attract the best talent, but also to retain it. Beyond hiring and retaining staff, offering health insurance also helps boost staff engagement and productivity — major advantages that can drive companies forward.
Insurance costs for employers can vary considerably based on policy options and even the number of employees included. Continue reading to learn more about employer health insurance and some of the main factors that can affect how much you pay for coverage.
The basics of employer health insurance
Employer health insurance involves a business selecting a health insurance option and offering it as an employee benefit to eligible staff. The premium cost for this coverage tends to be cheaper than individual plans, making them desirable for employees and employers alike.
Some companies, however, have been moving away from the corporate health insurance option in recent years. This is partly due to economic constraints that have forced them to make cutbacks, as well as rising health care costs that make health insurance too expensive.
Insurance costs for employers
The cost of employer health insurance depends on a number of different factors. These are the three main methods for determining what portion of the policy the employer pays:
- Full payment: The employer covers all health care costs for employees. This is generally the most expensive option.
- Partial payment: Insurance costs are split between the employer and the employees. The insurance premium is lower on both sides, but not totally free.
- Voluntary payment: The employer acts as a middleman, finding health insurance coverage for employers, who can then choose to join and pay for voluntary benefits if they want.
The types of employees you offer coverage could also affect the amount you pay. Many employers choose a health insurance plan that only covers their full-time workers, but others might extend coverage to part-time employees.
Employers are not required to provide health insurance to contractors even if they are full time and other full-time staff receive coverage. However, some employers do choose to extend coverage to contractors. Insurance policies that include a greater number of employees could have an impact on the amount you pay for the plan.
Benefits for employees
Competition for labor among companies is becoming fiercer, and employers need to provide a robust suite of incentives to attract top talent. As private health insurance premiums continue to rise, corporate health insurance is an effective way for companies to offer affordable coverage plans to their employees, making them feel valued and respected.
The rise of the “gig economy” in recent years has also caused workforce turnover to rise. In 2018, the Australian Bureau of Statistics found that around 1 million people — or 8.1% of the workforce — changed employers. This figure represented a slight uptick from the previous year. Constantly having to train new employees can be extremely costly for employers. However, offering employees health insurance — along with other benefits — is one of the most effective ways to increase employee engagement, satisfaction and ultimately retention.
Employees are generally more productive when they feel valued by their employers, so employer health care can play a significant role in boosting their output and efficiency. More than that, absenteeism due to illness is one of the major problems facing Australia’s workforce. By offering comprehensive health care coverage, you can substantially improve the health of each of your employees, helping them miss fewer days and making them more efficient as a result.
What are your coverage options?
Health coverage options tend to be broken down into three different categories.
- Hospital insurance: Hospital coverage encompasses treatment in private hospitals, including accommodation, prescription drugs, diagnostic, pathology and medical services. One of the main health benefits of hospital coverage for employees is that they (and their families, if it includes a family plan) have the freedom to choose a primary care physician, a hospital and can even avoid some of the long elective surgery wait lists.
- Extras insurance: Extras go beyond hospital coverage to include treatment not covered by Medicare, including dental, eyecare and physio. Many extras policies include preventative treatments — like regularly scheduled dental cleanings — which can help to lower medical expenses for employees later by reducing the chance of a major health problem.
- Combined insurance: A combined insurance plan includes both hospital and extras, so employees have access to a wide range of coverage options and a more extensive health plan.
Partner with HICA
Employer health insurance is a necessary part of any benefits package to help organisations keep up with today’s workforce. HICA is Australia’s leading independently-owned health insurance brokerage, and we are committed to helping you find the perfect plan for your organisation. As health insurance advocates, we prioritise customer service.
With more than 35 years of experience in the corporate sector, you can feel confident that our broking and consulting services will help you make an informed decision about your health coverage.
Contact us today for a free, no-obligation consultation and find out more about your options.