Employer Health Premiums
Employees are valuable assets to any business enterprise. Therefore, employee`s health, and the health of employee`s family members affect the profitability. If the employee is sick and he attends the office, he is likely to do a bad job, pass on infection to another if it is an infectious ailment, and be absent on the following day or several of the following days. Effectively, the business is forced to absorb the loss due to absenteeism or inefficient work. Even if the employee`s family member is sick, the employee remains disturbed at the office and this may affect his or her performance at the office.

To prevent such losses, employers have some health programs and policies in place for their employees. Employer health insurance is one of these measures. The employer organizes medical care for the employees and their families through some managed care. Of course, this premium contribution towards group health insurance is generally deducted from the employee`s salary. It may, however, be subsidized partially or wholly by the employer. This premium is known as Employer Health Premium to differentiate it from any other health insurance premiums that the individual may purchase outside the group. Employee health insurance premiums have grown substantially since 1998, and are expected to grow still further, as more and more employees are realizing the advantages of such perk. This growth is fueled by the rising health care costs.

Advantages of such employer health insurance programs are that the employer bargains and studies the insurance documents for the employee. There are several clauses in insurance policies that a layman is not aware of or does not fully understand the implications of. Employer uses the services of professionals for providing such group health insurance policies, who study each clause in depth. Because of the size of the business, the providers are able to offer substantial discounts, which are passed on to the employees by collecting lower premium from them.

A major disadvantage of employer health insurance programs is that the cover ceases once the employee leaves the organization for better job elsewhere or for any other reason. Effectively, if the employee were to start a fresh health insurance policy at that point of time, the premium would be much higher. Since it is a group insurance, ailments specific to an individual or the family member/s may not be covered. This forces the individual to purchase other policies outside as well, which may effectively increase the individual`s overall health care costs in personal budget. In policies where employer is the contributor of these health insurance premiums, there is every possibility of employer having compromised on some ailments to reduce costs.