Employer-sponsored health insurance is often overlooked by organisations in Australia when putting together their benefits packages for workers. There are, however, numerous advantages for both employers and employees that key decision makers should consider.

Offering employer-sponsored health insurance helps companies stand out in a crowded field of competitors to hire the best talent. Once staff are on board, insurance helps make employees feel valued and respected, boosting their employee satisfaction and increasing chances of retention.

The employees benefit from a potentially lower health insurance premium than individual health insurance, allowing them to reinvest their savings into other priorities. They also avoid the hassle of having to sift through numerous policy options and choose their own individual plan.

Continue reading to learn more about how your organisation — including both small and large employers — and workers can benefit from an employer-sponsored health insurance policy.

What is employer-sponsored health insurance?

Employer-sponsored health insurance is health care coverage that eligible workers receive through their organisation as an employee benefit. Not every employee has to be covered, however, even if the employer does pay for insurance; companies often provide health insurance only to their full-time employees. In some cases, they might choose to extend coverage to part-time employees.

Employers are not required to provide insurance coverage to contractors, even if it’s offered to other employees and the contractor works full time, though some employers will choose to extend benefits to staff who fall into this category.

Payment regimes differ by policy, and the amount the employer agrees to cover can have a major impact on the amount the employee pays every month. Employers may either cover the entire health insurance premium, making coverage free for employees; a portion of the insurance plan, leaving the rest to the employee; or they may simply choose to select and endorse coverage options that employees can join voluntarily.

Among small employers, there’s a misconception that employer-sponsored health coverage only makes sense for big companies with hundreds of staff and deep pockets. However, small employers stand to gain just as much from offering insurance coverage as large employers, and they can do so without accruing additional costs, as insurance plans can be tailored to fit their budgetary circumstances.

Benefits of employer-sponsored health insurance

Employer-sponsored health insurance is an advantageous option for employers that can afford it, and it can pay off remarkably in the long term.

For employers

• Hire better talent: The “gig economy,” combined with the COVID-era transition to remote work, has opened a world of opportunity to employees, creating fierce competition between companies for the best talent. Offering employer-sponsored health insurance helps organisations distinguish themselves from their competitors and position themselves as more attractive work destinations for potential new hires.
• Boost retention: It isn’t enough to hire top talent — you also have to keep it. In today’s digital job marketplace, it’s easier than ever for qualified applicants to find a new job if they feel their current position isn’t meeting their expectations. Providing a comprehensive employee benefit package, including health insurance, demonstrates to employees that you care about their health and well-being. This can make them feel valued and appreciated, deepening their sense of belonging to your organisation.
• Reduce absenteeism: Absenteeism has become an increasingly acute problem for companies in Australia. One report found that absenteeism costs the Australian economy $44 billion per year. Providing quality health insurance to employees helps improve their quality of health, helping them miss fewer days at work and therefore making them more efficient contributors.

For employees

• Cheaper premiums: For employees, the greatest benefit of employer-sponsored health insurance is that their health care premiums are usually substantially cheaper than if they bought their own insurance. With premiums reduced, employees have more money in their pockets that they can use to invest in other health care initiatives to further improve the well-being of themselves and their families (if family coverage is included).

• Better health options: Depending on your coverage plan, employer-sponsored private health insurance may provide additional health options. These include services that aren’t covered under Medicare, including physiotherapy, dental and optical. More than that, private health insurance helps reduce long wait times for some treatments.

• Greater convenience: The health insurance landscape can be difficult and time-consuming to navigate, especially for those who have other priorities that leave little time to devote to this task. One of the advantages of employer-sponsored health insurance is that the employer takes responsibility for researching all available health insurance options and choosing the one they think makes most sense for them and their employees’ needs.

Partner with the experts

For many companies, employer-sponsored health insurance provides a litany of benefits to both them and their employees that can help them stand out from the competition and retain top talent. If you’re interested in establishing a corporate health insurance plan, reach out to one of our representatives at HICA.

As Australia’s leading independently-owned health insurance brokerage, we are committed to helping you find the perfect corporate health plans for your organisation. With over three decades of experience in the corporate sector, you can feel confident that our experts will help you make an informed decision about your health coverage.

Contact us today for a free, no-obligation consultation.