Why Companies Provide Health Benefits to their Employees

There are number of reasons that employers provide health benefits to their employees as opposed to requiring them to purchase their own coverage.

(i) Peace of Mind

Providing health benefits provides employees with peace of mind that in the event of them becoming ill, they will be taken care of and able to return to work as quickly as possible. Having staff absent through sickness results in reduced productivity and the employer has a vested interest in ensuring that employees return to work as soon as possible.

(ii) Retention of Staff

Providing health benefits can help to retain and also to attract staff, remaining competitive in the job market. Whilst there is no law that requires employers to provide health benefits, if competitors are providing this coverage and a company is not it will be more difficult for the company not offering health benefits to attract staff.

(iii) Employee Compensation

Providing health benefits provides an additional means of compensating employees. Healthcare is expensive and normally costs significantly more when purchased individually. An employer that provides this cover is often perceived as being more caring and considerate towards its employees.

(iv) Group Discount

Providing health benefits can achieve the discounts and benefits available from group purchasing. Should an employee be forced to buy his or her healthcare coverage the cost is often significantly more than under a group scheme and the employee would need to be compensated by a higher remuneration from the employer. In addition persons with poor medical histories are much more likely to be able to acquire broader coverage when under a group scheme.