More than half of Americans - more than 180 million hardworking individuals and their families - receive health insurance through their workplaces. Employer-provided insurance provides access to affordable health care, effective ways to improve health, and peace of mind. A study by Avalere Health found that in 2022, employers with 100 or more employees will realize a 47% return on investment in offering health insurance. The return on investment was in the form of increased employee engagement and retention, increased productivity, reduced health care costs and disability payments, and tax benefits. Avalere estimates that this ROI will increase to 52% by 2026.
According to Avalere, employers will see a $346.6 billion gain in 2026, including $108 billion in direct reductions in medical costs and $139.70 billion in tax credits.
Quality health benefits for employees
Taking care of employees by providing quality and affordable health benefits is not only the right thing to do, but also a boon to business, writes Alabama State Senator Lance Bell in an article for Yellowhammer. "Employer-provided insurance is a great example of private sector investment in the workforce," Bell notes. "It's a commitment by employers to offer hard-working Alabama residents good, quality health care at a fair price - a commitment that not only makes financial sense, but also inspires loyalty and helps retain top talent."
According to Ray McCarthy, president of Associated Industries of Missouri, the state's oldest business association, this Avalere study shows conclusively that companies also benefit by having a healthier and more productive workforce. "Providing health insurance is a strategic move that doesn't just fulfill a basic need. When companies provide health benefits, they position themselves as competitive players in the labor market by attracting the best talent," McCarthy writes in The Missouri Times.
Investing in employers and employees
Employers of all sizes and industries, from small businesses to large corporations, know the benefits of providing health insurance to their employees. "Having healthy people who don't have to dwell on health-related issues is a benefit to my entire team," says Duane K., a small business owner in Pennsylvania. "The longevity of our employees, I think, pays for the investment."
According to the AHIP Coverage@Work survey, employer-provided insurance provides them with financial peace of mind. Respondents also reported that insurance plays an important role in attracting employees and an even more important role in retaining them. On average, the company pays 70-80% of the cost of insurance, and most had a more favorable impression of companies that provide health insurance benefits to their employees.
"Small business owners care deeply about their employees, customers and community. They continue to make incredible sacrifices to be able to invest in the well-being of their employees. With high inflation and acute labor shortages, small employers are more committed than ever to meeting the needs of a diverse workforce and remaining competitive," said Josselyn Castillo, manager of federal government relations at NFIB. "It's encouraging to see that consumers are so appreciative of the investments employers are making to keep employees healthy, happy and engaged."
Avalere's research confirms what many employers know: Employer-sponsored insurance helps build a stronger workforce and gives employers valuable benefits they can provide to their employees.