Why Employee Benefits Matter

Using a PEO is often the easiest way for small and medium sized companies to offer their employees a comprehensive employee benefits package. Can offering an employee benefits package help your company?.... just look at these survey results. According to a study done by EBRI/CHEC/BCBSA 2000 Small Employer Health Benefits Survey:

Most small employers offer sound business reasons for offering health benefits to workers.

  • 80 percent report that it helps with recruitment and retention
  • 70 percent report that it increases productivity by keeping employees healthy
  • 69 percent report that employees demand it
  • 68 percent report that it reduces absenteeism by keeping workers healthy
  • 88 percent report that they offer health benefits because it is the right thing to do

When specifically asked whether offering health benefits has an impact on their business, most small employers with benefits agree that it does:

  • 78 percent report that offering this benefit has an impact on employee recruitment
  • 75 percent indicate it has had an impact on employee retention, attitude and performance
  • 67 percent report an impact on the health of their employees
  • 58 percent state the offering health benefits has had an impact on absenteeism

See how your company compares in offering employee benefits. Review the United States Department of Labor document for:
Employee Benefits in Small Private Industry Establishments, 1996

Reality of Tax Treatment for Employers

Health insurance premiums paid by employers on behalf of workers are tax deductible for employers as a business expense. Health insurance premiums paid by employers are treated the same way other labor costs and general business expenses are treated under the tax code.

Reality of Tax Treatment for Workers

The amount that employers pay on behalf of their workers health premiums is excluded, without limit, from workers' taxable income. If a worker purchases health insurance directly from an insurer, generally only a portion of the premium can be deducted from his or her taxable income. For individuals who do not receive employment-based health benefits, total health care expenses (including premiums) are deductible only if they exceed 7.5 percent of adjusted gross income, and only the amount that exceeds 7.5 percent of adjusted gross income is deductible.

Because the costs for employee benefits continue to rise, savvy companies are joining a PEO to offset rising costs. For an overview of health insurance price increases visit this link.

Offering health benefits to your employees can improve your business.
Seeking better health insurance and benefits for your staff? Let's find it.