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Employee Health Coverage Is One Of The Best Investments Your Company Can Make

How much your Colorado business will pay in health insurance costs for employees depends on many factors. Every company, like every workforce, is unique. The number of employees, their overall health and healthcare needs, the kind of coverage you provide them, and how much your employees contribute to their coverage all go into the mix when figuring out the cost of group health coverage for your company.

When considering health insurance costs for employees, you should also consider the cost of not offering them coverage. In Colorado’s current labor market, where companies are struggling to find and are competing for top talent, companies that offer health insurance benefits will have the upper hand, as benefits are one of the top considerations for most job applicants. Put simply, failing to offer health insurance coverage can cost you the opportunity to attract, hire, and retain the workers you want.

How Do Colorado Businesses Pay Health Insurance Costs For Employees?

When an employer offers group health insurance coverage to its employees, they usually do so through group health insurance plans. In Colorado, health insurance companies such as Aetna, Humana, Anthem, Kaiser Permanente, UnitedHealthcare, and several other insurers offer multiple group plans specifically designed for the needs and budgets of small businesses.

Here’s how employee group health insurance works. Business owners select a plan from one of the carriers and purchase insurance for their “group” of employees and their dependents. Companies can choose to offer coverage to full-time employees only, or they can offer it to part-time employees as well if they so choose.

A company that enrolls in a group health insurance plan will typically pay the total costs of coverage to the health insurance company and deduct premium contributions from the paychecks of employees who enroll in the plan. The amount of those contributions will impact how much an employer will ultimately pay out-of-pocket for a group health insurance plan.

Average Health Insurance Costs For Employees

While your costs will vary depending on the factors mentioned above, you can get a general sense of what you can expect to pay by looking at the average amounts employers spend on employee health insurance.

For the past 24 years, the Kaiser Family Foundation (KFF) has surveyed American employers to “look at trends in employer-sponsored health coverage, including premiums, employee contributions, cost-sharing provisions, offer rates, wellness programs, and employer practices.” KFF’s surveys are highly regarded and widely relied upon, and they released their 2022 report at the end of October.

Here are some of their findings:

Total Premium Costs

  • In 2022, the average annual premium for employer-sponsored health insurance was $7,911 per employee for single coverage and $22,463 for family coverage.
  • At small companies, average premiums are $8,012 for single coverage and $22,186 for family coverage.
  • At large companies, average premiums are $7,873 for single coverage and $22,564 for family coverage.

Employee Contributions

  • Participating employees contribute an average of 17% towards the premium for single coverage through payroll deductions and 28% of the premium towards family coverage.
  • The average annual amount contributed in 2022 by covered workers is $1,327 for single coverage and $6,106 for family coverage.
  • Participating employees at small companies typically must pay more of the premium for family coverage than employees who work at large companies (36% vs. 26%).
  • The average contribution amount for participating employees in small companies ($7,556) is higher than that for large firms ($5,580).
  • 31% of participating employees at small companies enroll in an employer-sponsored health plan which requires them to contribute more than 50% of the premium for family health insurance coverage, compared to 7% of their counterparts at large companies.

Reducing Health Insurance Costs For Employees

Any smart business owner wants to save money when and where they can. When it comes to group health insurance, the most straightforward way to reduce costs is to either increase the amount employees contribute for coverage or offer a plan with fewer benefits, higher deductibles, and fewer choices.

But for most Colorado business owners, neither of these two options is particularly appealing. No business owner relishes telling employees that they’ll pay more or get less coverage. Fortunately, there are also other, less painful ways of reducing small business health insurance costs, including:lower health insurance cost for employees with hsas

  • Wellness Programs. While no policy or program will keep workers from getting sick or needing medical care, a small business wellness program can keep your employees healthy and reduce the likelihood of illness or injury.
  • Health Savings Accounts (HSAs). Employees can use these tax-exempt accounts to pay for certain medical expenses. These accounts provide employees with tax breaks while also reducing small business health insurance costs.
  • Tax Breaks. All health insurance-related expenses an employer pays are 100 percent tax-deductible. Additionally, under the Affordable Care Act (ACA), many small businesses can earn tax credits of up to half of their premium expenses during any two-year period that they offer employer-paid health insurance.

Of course, one of the best ways to get the most bang for the least amount of bucks is to work with an experienced and local Colorado small business group health insurance broker like Preferred Insurance. We work with and can get quotes from several different carriers. That means you’ll get plenty of coverage options that offer various features at prices likely to fit any budget.

Preferred Insurance: Colorado’s Premier Small Business Health Insurance Broker

As an experienced, locally owned Colorado Springs business health insurance broker, Preferred Insurance works closely with businesses of all sizes to develop and implement health insurance programs that make sense for employees and employers. Our knowledgeable and accessible representatives are here to answer your questions and provide solutions to keep you and your workforce safe and healthy. We offer free quotes in less than 48 hours.

Call Preferred Insurance today to schedule a free consultation about your small business health insurance needs.