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Small Business Employee Benefits and HR Blog

You may be paying for your boss's health insurance

When you think about how most Americans view health benefits, you'll realize how bizarre the whole system really is.  Benefits are these magical things that employers are supposed to provide because they're horrible people if they don't.

Employer health benefits do make sense for a lot of reasons.  Primarily, as we've mentioned before, there are great tax breaks for employers and employees if health insurance is purchased through the employer (regardless of who actually pays for it).  However, some people are smart enough to take advantage of the general lack of understanding surrounding how benefits and insurance work.

There are a lot of people that elect into group health insurance plans because they think that it's a benefit the company is offering them.  The problem is, group health insurance only benefits individuals if either the employer is paying a large part of the premium or the individuals couldn't get insurance on their own.  For many people on group plans, neither of these are true.

Imagine that you're the owner of a small company with 10 employees.  You have a preexisting medical condition and you're trying to figure out how to get insurance.  What better way to help cover the costs than to start a group plan for your company?  This way you and all your employees pay the same amount so you can pay less because you have healthy employees.  Any healthy person that decides to buy into that group plan is effectively paying for their boss's health insurance.

Certainly there need to be better options for people with preexisting conditions so that this situation would never need to come up in the first place, but that doesn't mean that it's a good idea to join a group plan with high premiums if you're healthy.  When you hear the term "Health Benefits", consider who is actually benefiting before assuming that it's in your best interest to join.

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