Could Cancelling Group Health Insurance Be a Kindness to Employees?

May 16, 2016

Small business owners who offer health insurance - or who are considering offeringZane Benefits | Could Cancelling Insurance Be a Kindness to Employees? health benefits - have an important question to consider: which type of benefit will be the best for the company and employees?

Traditional business sense says offering a group health insurance plan is the best way to go, but here’s something to consider - cancelling (or not offering) group health insurance may be a kindness to employees, and to your small business’s bottom line.

Why? According to a recent Forbes article, there are three main reasons.

Escalating Costs of Group Health Insurance Premiums

Over the past 15 years, the cost of group health insurance premiums has increased over 200 percent - far outpacing inflation and wages. Today, the average total cost to cover an employee is $6,251 a year for single coverage (2015) and $17,545 a year for family coverage.

Meanwhile, individual health insurance has become more accessible and more affordable. In many states individual health insurance costs up to 60 percent less for similar coverage.

As such, it is a kindness to allow employees (and the business) to save on the cost of health insurance.

Health Insurance Subsidies

For many small business employees and owners, the health insurance subsidies make individual health insurance even more affordable.

How affordable? For those eligible, the average out-of-pocket premium payment was less than $100 in 2015. Those who make approximately $47,000 (single) or $97,000 (family of four) are eligible.

But of course, an employee is only eligible for these discounts if he or she does not have access to affordable group health insurance through an employer. 

As such, it can be a kindness for small businesses not to offer group health insurance to allow employees - and their families - access to the health insurance subsidies.

Health Benefits Software to Ease the Transition

For decades, the predominant way to offer health benefits has been through a group health insurance plan. Today, as more and more small businesses transition employees to individual health insurance, the times are changing. And yet, you may still have hesitations. That’s where a specialized health benefits company can bring expertise and assistance.

Health benefits software companies who specialize in individual health insurance reimbursement can help your company:

  • Set up a compliant plan to reimburse employees for individual premiums.
  • Provide resources to employees to select an individual health insurance plan.
  • Manage the benefit program quickly and easily.


With the escalating costs of traditional group health insurance, the affordability of individual health insurance, and the ability of businesses to reimburse individual premiums, many small businesses are finding it is a kindness to employees to cancel group health insurance.

What do you think? What questions do you have? Leave a comment or question below.

35 Answers To Common Questions on Individual Health Insurance Reimbursement

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