Six out of 10 employees rate health benefits as a very important contributor to job satisfaction.1 So if you’re not already offering them, here are three reasons to consider it.


Benefits are vital for attracting the right talent to your company and keeping it there. Retention is especially important when you consider that employers typically spend about a fifth of an employee's salary to replace a worker who leaves.2 So for an employee earning $50,000 a year, it costs about $10,000 to replace him, versus an average annual health premium of $6,690 (of which the employee typically pays a portion).3


When companies do not offer group insurance, employees often look for a higher salary. But many small business owners overlook that contributing to employee health insurance can be potentially more cost-effective than raising an employee's salary. Why? Health insurance contributions are tax-deductible to the employer and tax-exempt for the employee. Plus, consider that 79 percent of workers would choose new or additional benefits over a pay raise.4


When workers are worried about how they're going to pay For things or handle a medical problem, they're stressed and distracted. Highly stressed employees are less engaged, less productive, and are absent from work more than those who aren't stressed.5 Having health benefits can help workers prioritize their health, keeping them well, and on the job.


  1. "Better Pay and Benefits Loom Large in Job Satisfaction;" Society for Human Resource Management, 2016,, opens new window
  2. “There are Significant Costs to Replacing Employees;" Center for American Progress, 2012, opens new window
  3. “2018 Employer Health Benefits Survey;”, opens new window Kaiser Family Foundation; 2018.
  4. "4 in 5 Employees Want Benefits or Perks More Than a Pay Raise;” Glassdoor Employment Confidence Survey (Q3 2015)," Glassdoor, October 2015,, opens new window
  5. Excessive pressure leads to low engagement and high absenteeism, Willis Towers Watson, 2014, opens new window

This material provided is a general summary and does not address all your organization’s specific issues. This material is for informational purposes only. It is not intended or written to be used, and it cannot be used, as legal advice or a legal opinion. It should not be relied upon in lieu of consultation with your own legal advisors. Insurance and tax laws and interpretations of those laws are complex and subject to change. None of the information herein is intended or written to be used, and it cannot be used, for the purpose of avoiding taxes or penalties that may be imposed.

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