In many countries, health care benefits aren’t tied to employment. But in the United States, many companies provide extensive healthcare benefits — general insurance, vision, dental, Health Savings Accounts, and more. There are a number of reasons why companies offer healthcare benefits, often relative to the company’s size and industry.

First: It Makes the Company More Competitive

A business is more competitive the more benefits it can provide. With larger enterprises, better healthcare benefits are used to secure better employees. A company can spend $800 securing an employee $5,000 worth of physical health benefits — and that same employee may see these healthcare benefits as more important than a $5,000 raise.

So, healthcare benefits can be a cost-effective way to provide benefits to employees without directly increasing salaries. These benefits do scale; the more employees there are, the more negotiating power the company holds, and the more likely they are to be able to save money in this way.

When employees are happy, they are also less likely to leave; the company is less likely to experience churn. The costs of training an employee can be substantial. The fewer employees that leave the better for a business.

For Smaller Businesses, It Can Represent an Opportunity

Some business owners like to get health care benefits for their employees because it makes their health care less expensive, too. This is a cooperative mechanic; it may cost them $800 a month alone for their healthcare, but if they sign up five employees, it might cost them $500 each. This saves everyone money and small business owners may need that health insurance not only for themselves but for their families.

There are many small businesses that can’t provide a complete, all-in-one insurance package, but can at least offer employees cheaper options than they could get through the marketplace.

Healthier Employees Are Better Employees

For many employers, though, it’s not a question of whether they’re saving monthly. Rather, it’s the fact that healthier employees tend to be more productive — and their morale is higher.

On a personal level, employers want their employees to be healthy — and they want to preserve a culture of health and safety. They want to take care of their employees and understand that the health system often relies upon employers providing health benefits.

On a business level, employers know that employees who are able to take care of their health are more likely to come in. They are less likely to call out. And they are more likely to be productive and accessible when they’re in the office. When employees aren’t able to take care of their health, sickness can run rampant through the office — something like the flu can go through the office because no one wants to stay home.

But with the proper healthcare, employees will be more active, vital, and happy. This leads to a better and more productive business overall.

There Are Many Types of Health Care Benefits

As a corollary to the above, it’s not always just health insurance that employers offer. There are many types of health benefits, and they have distinct advantages.

As an example, employers might provide additional maternal and paternal leave for those who are having children. This reduces the chances that employees will come to the office stressed and distracted and increases their overall long-term happiness, making it less likely that they will leave the business.

Getting more creative with health care benefits can make it easier for employers to support their employees without having to invest a lot of money into those benefits. Providing Health Savings Accounts, for instance, can be cheaper than top-of-the-line insurance but may still leave employees with the flexibility in their medical spending that they prefer to have.

And employers don’t need to foot the bill for the majority of insurance; instead, the health insurance benefits can be deducted directly from the employees’ paychecks.

To find out more about the healthcare benefits that you can provide your employees, you can talk to an insurance agency. But you may need to dig a little deeper into your accounting to determine which is best for you. And, of course, all your healthcare benefits can be managed for you through a managed payroll service.