Health Insurance: what US employees expect, why US employers benefit, and how to make it easy if you’re growing a business in the USA
If you’re looking to employ a worker in the US then providing health insurance can benefit both you and your employee — but there are also pitfalls to avoid.
US employees have high expectations when it comes to health cover. Although you’re not legally required to provide it, employees generally expect to receive it — especially if they’re high wage earners.
More than 175 million Americans (about half of the total population) receive health insurance from their employers. More than 98% of large employers offer this benefit. For small employers the figure is lower, at 46% (Kaiser Family Foundation 2014).
The popularity of health insurance in the USA is largely a legacy of World War II, when the US Government capped wages and employers responded by introducing health insurance as an alternative means of paying their employees. This led to tax policies supporting employer-sponsored health insurance plans. The policies, and the health insurance they encourage, have stood the test of time.
Providing Health insurance is cost effective for both the employer and the employee
Health insurance is categorized as a tax-deductible business expense for the employer. This also benefits the employee, who doesn’t pay tax on this benefit and so gets more value than if they received the compensation as wages. Find out how much your US employees’ healthcare will cost your business.
… but administrating health insurance can be complicated and expensive
If you’re looking to employ a worker in the USA then offering health cover is clearly an attractive option — but it won’t necessarily be straightforward. In fact it often becomes one of the most difficult challenges US employers have to face. There are almost endless options when it comes to health plans, and it’s important to choose carefully, to find a plan that will appeal to a diverse group of employees while remaining affordable. Furthermore, the insurance will be based on the state where the employee lives, so if you have employees living in different states, you must deal with the complexity of managing several plans.
Foothold American can manage all aspects of health insurance for you and your employees — so you can focus on growing your business in the USA. Contact us to find out how we can help.