Firstly, before purchasing a health insurance policy, the company must evaluate the need for the policy and help to understand it by comparing the benefits and expenses. What are the main benefits of this policy? Let's divide them into two groups:
Benefits for employees
Most medical expenses can be covered (in whole or in part) with the insurance policy, rather than requiring the employee to pay out-of-pocket.
You will no longer have to worry about sudden expenses in your health, so you will be able to reduce your financial "airbag".
If necessary, treatment services will be available immediately - even if the funds are not available at the time. It is also important to note that the state-funded service will not have to be awaited in the endless queue.
Benefits for companies
An effective way to give your employees a financial benefit. According to Latvian legislation, if the policy price does not exceed EUR 426 and 10% of the employee's gross salary per year, the purchase of the policy shall not be subject to salary taxes.
For example, by raising the employee's salary fund for 30 EUR per month, the employee will actually receive half the amount after all taxes in his account.
By contrast, by redirecting the same amount to the purchase of health insurance, the employee will spend up to a few thousand euros in medical services if he or she needs.
If the company has to compete with other employers on labour, health insurance is one of the most valued benefits in the eyes of employees. Health insurance increases the company's competitiveness in the labour market.
Reduces the risk of employee absence due to health problems, as employees have opportunities to take care of their health in a timely manner.
Some insurers distribute incorrect information that companies are entitled to tax breaks when purchasing health insurance. This is not the case, the statutory 426 EUR threshold is incorrectly interpreted, by which the policy is purchased (which is the employee's benefit) is not subject to payroll taxes.
What are the costs of buying a policy?
The policy price is influenced by several factors –
Policy content – The policies are very diverse and can be customized, both including and otherwise services. It is also possible to limit the ease of use of certain services group and the policy itself. Options to adjust the policy are almost unlimited.
Number of employees – The more insured employees, the more likely it is to have the need for medical services. Some employees will need medical services, some will not. On average per insured will have lower total compensation costs.
Work sector - Insurers accumulate their previous remuneration statistics and group it according to the companies, draw conclusions on which sectors use fewer policies which use more.
Location – Medical institutions have different service pricing and, unlike regions, are cheaper or more expensive. Insurers assume that insured employees will mostly want medical services to receive in the immediate area.
Prices for medical services – They are constantly fluctuating and the trends are increasing lately. As the payment of these services is the basic task of the policy, policy prices are also following the prices of paid services.
The policies can be purchased from 100 to 1500 EUR and more than one employee. It should be remembered that the price of the policy is subordinate to its content and usage capabilities.
Insurance companies are offering different prices of their policies in fierce competition. It is important not to get lost in their offers, so you can instead carefully compare them, and eventually choose the one that suits you.
In general, we need to evaluate what is beneficial to the company itself, but we hope that this article will help you evaluate the need for the policy and understand the principles of policy price formation.
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