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Blog Banner of Why Should Employers Offer Health Insurance To Employees

Why Should Employers Offer Health Insurance To Employees?

A company operates with its workforce at the core of its operations. As part of a progressive work culture, companies offer employees several benefits, including insurance coverage. When you offer employee health insurance as part of the pay benefit working for a company, workers are encouraged and feel more comfortable working in jobs that require physical labor.

Industries such as manufacturing, mining, construction, and shipment that employ a large number of blue-collar workers can benefit from offering group health insurance to the workers.

In this article, we will take a closer look at employee health insurance and how it benefits companies and workers.

Employee health insurance is a benefit extended to workers within the company. The coverage is not only for the workers employed by the employer but also provides insurance coverage to the rest of their family members as part of the policy. 

Companies that offer medical insurance for employees pay full or partial premiums for their insurance policies. Previously, it was an optional decision for employers to offer employee health insurance as part of work benefits; however, post-pandemic, the Indian government has made it mandatory for employers to provide employee medical insurance.

The decision was implemented in April 2020, and all industries must provide employee health insurance irrespective of skills or type of employment. Besides offering a safety net for workers to deal with medical expenses or costly treatments, medical insurance for employees is an employee prosperity and value plan.

It adds to your employer’s brand and communicates to the workers that you care about their well-being. Employee health insurance can be a powerful tool to engage workers and earn loyalty. 

Why should you offer health insurance to employees?

As an employer, you must know why some of the most successful companies offer health insurance to employees. Employee health insurance helps your company operate more strategically, efficiently, and effectively.

Here are some critical reasons why offer health insurance to employees.

1. Employee benefit

With an employee health insurance policy, workers and laborers can afford individual health insurance that might otherwise be out of reach. The workers do not have to pay the premium for the policy as the company pays on their behalf. This is how workers receive health insurance coverage free of cost or at lower prices.

2. Benefit from tax incentives

For employers, there is a financial advantage to providing health insurance to the workers as tax benefits are associated with it. Generally, the employee health insurance premiums are 100% tax deductible which offers companies a way to save on federal business taxes.

Additionally, offering health insurance coverage as part of the compensation package to the workers potentially means you can reduce the payroll taxes. Whether you provide individual/group employee health insurance, you can be eligible for a business health care tax credit.

3. Hiring and retention

Since the pandemic, employees have become more discerning about opportunities that offer better health benefits. People-oriented companies provide employee health insurance that also engages employees to stay with the company for longer.

This is why employers should provide health insurance because it helps with the retention of workers. Also, it attracts workers to your company as well.

Should employers choose individual or group health insurance?

A solid employee health insurance plan can contribute to your employees’ well-being and benefit your company simultaneously. However, you must choose between individual and group health insurance policies wisely.

A group health insurance policy covers a group of workers. It is only available for employers, and employees pay little or no premium towards a group health insurance policy. Usually, it only covers the workers, but some policies also cover their dependents. 

An individual health insurance policy is the commonly available option that requires a health check-up of the individual before the policy is issued. Typically, individual employee health policy requires much more due diligence and has a long waiting period.

As an employer, you must choose a group employee health insurance policy because it acts as a master plan offering uniform coverage to all workers who are part of a group. It allows you to provide workers with the same type of insurance coverage depending on their position within the company.

How to choose the best health insurance for your employees?

There are considerations to keep in mind when you pick a group health insurance for your employees.

  • Choose an employee health insurance plan with convenient options like telemedicine and urgent care visits.
  • Opt for plans that provide cost savings to the workers so they can afford expensive treatment easily.
  • Finally, look for insurers to provide a personalized experience to the employees when they have any questions regarding their health insurance.


Employee health insurance is a significant benefit that must be included as part of the pay package. It not only helps workers afford treatment and medical coverage for themselves and their families but also offers cost-saving benefits for employers.

Truein is an employee time and attendance management software that can assist you in better managing the workforce. It assists managers with overtime and schedule management, it ensures that workers are not overly burdened or burnout.

Truein also features leave management, attendance policy management, and real-time monitoring among other features. Schedule a free demo today and see how Truein can automate the attendance management at your organization.

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