The Overview of The Cost of Group Health Insurance

The costs of group health insurance premiums is typically split 50/50, meaning the employer will cover 50% of the premium costs with the employee responsible for the remaining 50%. Even though minimum employer contribution varies by state, these percentages have changed in recent years due to the dramatic increase in health insurance costs, with employees bearing an ever-increasing share of the total costs.

There are tax incentives available to both employers who offer group health insurance and their employees. Business owners can generally deduct 100% of the premium costs and can reduce their payroll taxes by offering group health insurance as part of an employee’s compensation package. Employees, on the other hand, can pay their share of the insurance premium with pre-tax dollars.

In an environment of ever-growing health care and health insurance costs, eligibility in a group health insurance is becoming critical for many employees. Even with paying a higher percentage of premium costs than in the past, employees still are better off financially (and receive greater choices) with group coverage than with an individual health plan. At the same time, business owners are fully aware that offering quality group health insurance creates a more satisfied, and therefore more productive, workforce.