Are you curious about how much does health insurance cost an employer per person?
This post examines the costs associated with employer-sponsored health insurance and why employers pay for health insurance.
Offering health insurance to your employees is an essential benefit that can positively impact their overall health and well-being. 80% of Indian employees consider employer-provided health insurance a crucial factor in job satisfaction.
This can increase employee loyalty, higher productivity, and better quality of life.
Providing health insurance also demonstrates to your employees that you value their health and well-being. In turn, this can boost employee loyalty, job satisfaction, and retention. Additionally, offering health insurance can help attract top talent in a competitive job market.
Let's explore the cost of employer-sponsored health insurance in India. According to the same Mercer Marsh Benefits survey, India's average annual premium for employer-provided health insurance in 2021 was INR 14,242 per employee.
This cost includes monthly premiums, employer and employee contributions, and tax credits for small employers.
So why should employers pay for health insurance?
The answer is clear: it's an investment in your employees' health, well-being, and overall productivity.
In the following sections, we'll examine the various factors contributing to the cost of health insurance and why it's essential to consider offering it to your workforce.
Factors Influencing Group Health Insurance Costs
1. Size of the Employer and the Covered Population
Premium costs vary. Small firms with less than ten employees pay an average of INR 13,317 per employee per year. In comparison, large firms with over 100 employees spend an average of INR 19,722 per employee per year.
2. Age and Health Condition of Employees
According to the IRDAI Annual Report, 2020-2021, the average annual premium for an individual health insurance policy for individuals aged 26-45 years was INR 8,022. In contrast, the average yearly premium for individuals above 60 years was INR 33,914.
3. Type of Coverage
The type of coverage offered by the employer can also impact the premium cost. For instance, the premium for family coverage is typically higher than for individual coverage. The average premium for family coverage was INR 27,798, while the average premium for personal coverage was INR 9,509.
4. Location
The geographic location of the employer's office can also influence the premium cost. For example, health insurance premiums in metro cities like Delhi and Mumbai are 40-50% higher than in tier-II cities like Lucknow and Jaipur.
5. Network Hospitals
A higher number of network hospitals may result in a higher premium cost. However, it can also improve employee access to quality healthcare services. For instance, the average premium for health insurance policies with network hospitals was INR 14,589.
Various factors influence the cost of group health plans for employers. However, providing health insurance to employees is an investment in their well-being and can lead to increased employee loyalty, higher productivity, and better quality of life.
By considering these factors, you can decide on the type of coverage to offer that balances cost and employee needs.
How much does health insurance cost an employer per person?
The average annual premium for employer-sponsored health insurance plans can range from INR 10,000 to INR 25,000 per person.
To put things in perspective, consider the analogy of a restaurant. Just as the cost of dining out can vary widely depending on the type of establishment, the quality of food and the location, the cost of health insurance for employees can vary depending on the level of coverage and the company's budget.
Just as some diners are content with a budget-friendly fast food meal, some employees may be satisfied with a basic health insurance plan that covers only essential services.
On the other hand, just as a fine dining experience comes at a premium, a comprehensive health insurance plan with a wide range of employer health benefits and services will cost the employer more.
It's worth noting that the cost of providing health insurance to employees can be a significant expense for many businesses, especially small businesses.
However, offering health insurance can also be a powerful tool to
- Attract and retain talented employees
- Reduce absenteeism
- Promote overall well-being
Workplace wellness playbook
Effective and easy to implant strategies to reduce absenteeism
It's essential for employers to carefully consider their budget and the needs of their workforce when choosing a health insurance plan.
How much should employees pay for group health insurance?
The cost of health insurance for employees themselves can vary depending on several factors, such as their age, health status, level of coverage, and the region where they live.
The average annual premium for employer-sponsored health insurance plans can range from INR 5,000 to INR 20,000 per person, depending on these factors.
For example, a younger and healthier employee may be able to secure a more affordable health insurance plan with basic coverage.
In contrast, an older employee or one with pre-existing conditions may need a more comprehensive plan that includes specialized treatments and services.
Additionally, the cost of health insurance can vary depending on the region where the employee lives, with some regions experiencing higher healthcare costs and, therefore, higher insurance premiums.
It's worth noting that the cost of health insurance can be a significant financial burden for many employees, especially those working in low-paying jobs or with limited benefits.
To mitigate this cost, some employers may offer to cover a portion of the employee's health insurance premium or provide additional benefits like tax credits or subsidies to offset the cost.
Important to know: Are Group Health Insurance Premiums Tax Deductible?
Looking Beyond Costs: Try Flexibility
Providing group health insurance coverage to employees is a crucial investment for any employer. It ensures their workforce's well-being and financial security and helps attract and retain top talent in a competitive job market.
While the cost of health insurance can vary depending on several factors, including the size of the company, the level of offered coverage, and the region where the business is located, employers can take steps to manage these costs by working with a trusted health insurance service provider.
At Loop, we understand employers' unique needs and challenges regarding group health insurance.
Our experienced professionals work closely with employers to design customized health insurance plans that
- Meet their specific needs and budget
- Offer comprehensive coverage
- Provide excellent customer service
- Include 24/7 consultations from top medical advisors
- Offer on-site claims advisor for every hospitalization
With Loop, employers know that their employees' health and well-being are in good hands.
If you want to provide group health insurance coverage to your employees, explore our offerings.
Take the first step in ensuring your workforce's health and financial security today with Loop.
