Ethical Reasons to Provide Health Benefits to Employees

April 24, 2024by Alex Strautman

Did you know that the idea of health insurance and other benefits from your job goes back to the 19th century? Back then in Europe, groups like mutual aid societies, guilds, unions, and fraternal organizations started creating plans to assist when an employee died. Then, as the Industrial Revolution kicked in and jobs became riskier, these plans began to cover additional medical needs.

The Path to Managed Care

Here’s a quick history lesson. The Granite Cutters Union is credited with establishing the first national sick benefits program in 1877. The International Ladies Garment Workers Union created the first union medical services program in 1913. The roots of today’s focus on managed health care date to 1933. That’s when Henry J. Kaiser and several large construction contractors formed an insurance consortium, Industrial Indemnity, which contracted with a small California hospital to meet the needs of their workers.

That experiment led to the creation of the Kaiser Permanente health plan in 1945. Today, Kaiser Permanente provides care and coverage to more than nine million Californians; total nationwide membership tops 12 million. According to Forbes, Kaiser Permanente is the largest health insurance company in the U.S., followed by two multi-state Blue Cross Blue Shield insurers (Elevance Health and Health Care Service Corporation).

Employer-Sponsored Insurance

Fast forward to present day and nearly half of Americans get their health insurance through their employer. According to the Kaiser Family Foundation (KFF), an independent, non-profit health policy research organization, that number in 2022 was 47% in California. It was higher in 30+ other states. Utah ranked highest with employer-sponsored insurance at 60%.

The motives behind why employers offer health insurance and other benefits to their employees are as diverse as the companies themselves — from ethical factors to productivity drivers:

  • A feeling of needing to do the right thing or a dedication to respecting everyone’s worth
  • Viewing health insurance not as a legal obligation but as a basic duty for employers to look after their employees’ health and safety
  • Employee wellbeing
  • A desire to keep a healthy workforce
  • A recruitment and retention strategy
  • A step toward improving employee morale
  • A goal to increase employee productivity by reducing absences
  • Wanting to engage employees and offer them a direct way to influence their health by giving them the ability to choose their own health plan and other benefits
  • A desire to help employees reduce their out-of-pocket costs for medical care

While the Affordable Care Act (ACA) requires Applicable Large Employers (ALEs) to offer health insurance to full-time and full-time-equivalent employees (and their dependents), research suggests that offering benefits is about more than mandates.

Many Employers Offer Coverage

The 25th annual employer survey by KFF found in 2023 that more than half of all firms (53%) offered some benefits to employees. Since 97.5% of firms in the U.S. have fewer than 100 employees (and 39% have fewer than 50 workers), there are many businesses offering benefits that are not required to do so. (Source: Data Pops by Paradoxes based on U.S. Census Bureau)

Among small firms that offer benefits, 30% of covered workers do not contribute to the cost of single (employee-only) coverage; their employer pays the full single coverage premium. A similar percentage – 32% – of covered workers at small firms contribute more than half of the premium for family coverage.

Getting Coverage for Your Group

If you want to contribute to your employees’ health and stability by offering them benefits, a good place to start is by talking with an employee benefits broker. A broker can provide you with information about your public and private exchange options as well as commercial health plans. Be sure to ask about each plan’s provider network as well as no-cost value-adds that may be available. If you don’t have a current broker, we make it easy to search for one.

There are eight participating health plans in the CaliforniaChoice private exchange. CaliforniaChoice offers you and your employees more flexibility, a full roster of participating physicians, medical groups, and hospitals, and much more.

You can choose from eight health plans and dozens of HMO, PPO, EPO, and Health Savings Account options:

  • Anthem Blue Cross
  • Cigna + Oscar
  • Health Net
  • Kaiser Permanente
  • Sharp Health Plan
  • Sutter Health Plus
  • UnitedHealthcare
  • Western Health Advantage

Best of all, with CaliforniaChoice, you decide how much you want to contribute to employees’ premiums. You can select a Fixed Percentage (50% to 100%) of a specific plan and/or benefit. Or you can contribute a Fixed Dollar Amount for each employee. Employees then apply your contribution to the health plan and benefits they like best. If their selected plan costs more than your contribution, the employee pays the difference. It’s that simple.

A 2023 MetLife study found “employees who understand their benefits are happier and have a greater sense of overall stability at work.” Eighty-two percent of employees believe their benefits give them a greater sense of stability. Contributing to your employees’ health insurance coverage creates security, fosters individual well-being, and establishes overall job satisfaction. With that in mind, it just makes sense to offer benefits to your employees in today’s competitive market. Many employers also consider it simply the right thing to do. To learn more about your employee benefits options, talk with a broker today.


Shopping for group health insurance?

This guide compiles a list of common questions you may have before you start offering health insurance coverage.