Study Shows Big ROI on Employer-Sponsored Health Insurance

Healthcare industry
Health insurance 101

What’s the ROI on employer-sponsored health insurance? More than you might think, according to a recent study. Companies that offer health insurance have more employee productivity, lower direct medical costs, better employee retention, and reduced recruitment costs, bringing in an estimated 47% ROI for those companies. That’s not all. Companies that offer health care coverage earn tax benefits and spend less on short- and long-term disability costs. Not only that, but the study indicates the ROI of employer-sponsored health coverage will continue to grow up to 52% by 2026.

While the study evaluated large and small employers (those with 100+ employees) there are plenty of good reasons to give health coverage for your small business employees another look, even the super small kind.

Cost benefits of health care benefits

A large study commissioned by the U.S. Chamber of Commerce and carried out by Avalere Health showed the benefits of employer-sponsored plans across various industries. The quick summary — most industries included in the study benefited significantly by providing health insurance options for their employees.

It’s a classic win-win scenario for employers and employees alike, and a big deal for the United States healthcare system where small and large employers are responsible for the majority of Americans’ health coverage — which includes almost 155 million non-elderly persons.

Why offering health care benefits matter

It’s a no-brainer that companies need to keep an eye on their bottom line and make sure their investments bring in a reasonable--or fantastic--return. Employers have continued to see the cost of health coverage rise, with premiums for family coverage reaching $22,000 in 2021.

It also stands to reason that companies that invest in their employees’ well-being should reap an ROI of improved employee satisfaction, productivity, and more. However, a lot of the evidence of the ROI from investing in one’s employees has been anecdotal--until now. This study, conducted on large and small employers with 100 or more employees, showed measurable benefits for companies that invest in their employees’ health and well-being through employer-sponsored insurance.

It stands to reason that improved health and productivity will also amplify the competitiveness of companies offering insurance and, thus, those industries as well. Robyn Boerstling, Vice President, Infrastructure, Innovation and Human Resources Policy at the National Association of Manufacturers adds, “...this report further validates that offering comprehensive and innovative health benefits is not only the right thing to do but also critical to attracting and retaining the best talent.”

Beyond Premiums

It shouldn’t be surprising to learn that more of the employer’s insurance costs are shifting to the employee. Average healthcare premiums for family coverage have risen 22% over the last five years and 47% over the last ten years. A Kaiser Family Foundation survey found that employers have been absorbing far more of the cost increase over the last several years. However, that trend will likely shift if health care costs and other inflationary measures continue to put pressure on employers’ bottom lines.

Yet, health insurance premiums are just one of employees’ out-of-pocket costs for health benefits. High deductible health plans have become more popular which means more costs for employees beyond the annual premiums. It means employers need to look beyond the monthly premiums and consider the total out-of-pocket costs for the employee health benefits package offered (and what other incentives they can throw in to encourage employees to sign on).

Decent’s two cents

Our Founder and CEO at Decent, Nick Soman, believes in the importance of quality healthcare and affordable insurance so much that he launched Decent with this in mind. We then built our health insurance program from the ground up, based on Direct Primary Care in order to provide accessible healthcare through unlimited primary care visits and $0 medical deductible plans. This model ensures that health plan participants have access to primary care physicians when they need it and that the physicians are paid regularly and well, so they do not have to answer to a fee-per-service model.

Today, Decent’s exclusive health insurance plans are part of the Professional Employer Organization (PEO) services we provide for all of our small business clients. As a PEO, we can band small businesses together to offer similar employee benefits that are usually only available to large employers from health, vision and dental to what you’d want from a robust human resources department (payroll, employee onboarding, and more).

Helping small business owners take care of their people is the right thing to do. This study also proves it’s good for business.

How much could your business save by switching to Decent?  Check out our rapid quote or contact our sales team at

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