Group health insurance can be a valuable tool to help you attract and retain top employees for your company. Every business wants to attract quality employees who will contribute to the growth and success of the company. In order to recruit and retain these people, many business owners offer group health insurance as an employee benefit.

Even if your company is small, you can still offer group health insurance, but before going forward, you must decide how much your employees will pay, as well as whether you want the plan to be managed care or fee-for-service.

Who Pays For it?

Most businesses that offer their employees group health insurance plans contribute towards the cost of the coverage. Some pay for all of the employees' premiums (for single coverage) and let the employees pay the premium if they need coverage for their families. Other businesses pay a percentage of the total cost.

The amount you choose to pay will depend on your own situation. First, think about how your contribution will affect your budget. Second, think about how it affects the desirability of your plan to your present and future employees.

Many businesses choose to have their employees make a contribution towards some of the cost, especially as health care costs and insurance premiums continue to increase.

Managed care vs. fee-for-service
There are two major types of health plans — managed care and fee-for-service. The plan that's best for your business is determined largely by your business location, the physicians and hospitals available through the plan, the options offered by insurance companies, and the constraints of your budget.

Managed care
These plans are agreements between certain doctors, hospitals, and health care providers, and are designed to offer a range of services to members at a reduced cost.

They go by many names, such as Health Maintenance Organization (HMO), Preferred Provider Organization (PPO), Individual Practice Association (IPA), or Point of Service (POS) plan.

Fee-for-service plans, also known as indemnity plans, allow your employees to choose health care providers themselves. This gives them a wide range of options that includes specialists such as cardiologists and surgeons.