Though it's not an actual requirement, providing health insurance is critical to maintaining your competitive edge. Quality healthcare is an influential factor for new hires that can significantly impact your business productivity and give it a competitive edge by helping staff feel supported.

More and more companies are turning towards group health insurance plans to provide top-notch healthcare for their employees at improved rates. They allow companies to access top-tier health plans without the cost and concern of administering them yourself.

In this post, we'll discuss how group health gives businesses a major competitive advantage, as well as how you can access it for your company.

Understanding Group Health Insurance

Group health insurance is a tactic to provide high-quality coverage at reduced rates split between employees and their employers. Because the group members act as policyholders themselves, it spreads the insurer's risk throughout the group, reducing further costs.

So, how does this work exactly?

Companies purchase the group plan, which is then offered to their employees and their families or other dependents. They require a minimum participation rate (usually 70%), and because of that, only companies or larger entities can purchase them. However, each group plan is typically specific to each entity, allowing significant degrees of customization depending on your industry.

From an employee perspective, group health plans offer them better coverage at a lower rate than they'd get it for on the market. That helps them feel more supported by their company and better capable of providing for their families and those who rely on them.

Ways Group Health Insurance Benefits Businesses

Group health insurance plans are a strategic asset because offering quality health coverage helps attract top talent in a competitive job market, where benefits often tip the scales in favor of one employer over another. For one, they ensure that your business complies with healthcare laws – which can be critical in maintaining employee wellness and preventing a PAGA claim against your company.

These plans boost productivity and morale by promoting a healthier, more secure workforce. Employees who have peace of mind about their health can focus their energy on their work, driving your business forward. If an employee or their family member has a health condition, group coverage can help them rest assured they have the proper coverage to handle anything that may occur.

Quality healthcare is a competitive advantage because it's a cost-effective means of providing employees with that reassurance. Your staff will feel more secure that they're financially protected from potential health issues and dedicated to their employer for enabling it.

How PEOs Increase Their Competitive Advantage

If group health insurance relies on a large pool of members to achieve its rates, it may be easy to presume that smaller companies wouldn't have access to this benefit. But even if your company is small, they can still achieve this benefit by working with a PEO partner.

PEO health plans work as group health insurance by default because they group all their clients' employees under their umbrella. When partnering with a PEO, they become the employer-of-record, where they officially represent employees while preserving your company's decision-making power. This process is called co-employment, and it relies on the PEO to absorb most of the risk and liability to allow companies to focus on their strategic efforts.

By spreading the financial risk across a larger group, PEOs can negotiate lower premiums while ensuring more comprehensive coverage than individual health plans. But they also take the lead in crucial tasks such as payroll processing to reduce errors and provide guidance for labor compliance to prevent costly PAGA claims.

PEOs act as your regulatory shield, protecting your business from risks and allowing you to focus on growth.

Gain a Competitive Edge with a PEO Partner

PEOs do far more than manage group health insurance plans and become integral strategic partners, guiding businesses toward their goals and outsourcing risk management. They help companies manage crucial but mundane tasks, freeing up their internal or growing HR team to focus on their employees.

Companies who work with a PEO partner can gain a competitive advantage from providing quality health insurance with group plans while also playing a pivotal role in supporting employees, which fosters a healthy and productive workforce.

PEOs lower your HR burdens while giving you best-in-class support from a team of experts in resolving complex human resource solutions.