Whether you’re leading a small startup or managing a growing team, there’s one strategic move that often gets overlooked until it’s a little too late: offering group health insurance.
Sure, it may not be as exciting as landing your next big client or launching a new product—but when it comes to building a loyal, productive team, health benefits are a game-changer.
Why Health Insurance Matters (More Than You Think)
Hiring is tough. Retaining good people? Even tougher. And in today’s competitive job market, salary alone doesn’t cut it. Offering quality health insurance sends a clear message to current and prospective employees: “We’ve got your back.”
Studies show that employees with health benefits are up to 40% more likely to stay with their employer long-term. That means less turnover, lower hiring costs, and a team that actually sticks around to help grow your business.
Now, let’s break down your options.
Option 1: Fully Insured Group Health Plans
This is the traditional model that most people are familiar with. As an employer, you:
- Choose a plan from a health insurance carrier
- Pay a monthly premium (along with any cost-sharing from employees)
- Let the insurance company handle the risk, coverage, and claims
Pros:
✅ Predictable costs
✅ Easy to set up
✅ Familiar process
Cons:
❌ Less flexibility
❌ Can be more expensive depending on your team’s health profile
This route is great for businesses that want something straightforward and hands-off. But if flexibility or budget is a concern, it might not be the best long-term solution.
Option 2: ICHRA (Individual Coverage Health Reimbursement Arrangement)
Don’t let the alphabet soup scare you—ICHRA is just a fancy way of saying: you set the budget, and your employees pick their own health plans.
Here’s how it works:
- You give employees a set amount of tax-free money each month
- They use those funds to buy their own individual health insurance
- Everyone gets a plan that fits their unique needs—no one-size-fits-all headaches
Pros:
✅ Flexible for diverse teams (remote, part-time, multi-state)
✅ Budget control for employers
✅ Employees choose what’s right for them
Cons:
❌ Requires more education for employees
❌ Some initial setup involved
ICHRA is especially popular among small businesses and modern teams that want to offer benefits without getting locked into rigid plans or high premiums.
So… Which One is Right for You?
The right answer depends on your goals, team size, and budget. If you want plug-and-play simplicity, a fully insured plan might work best. If you’re looking for customization and cost control, ICHRA could be the way to go.
At the end of the day, offering health insurance isn’t just about compliance—it’s about creating a work environment where people feel valued. When employees know you care about their well-being, they bring their best to the table.
Let’s Make It Easy
Confused about where to start? You’re not alone—and you don’t have to figure it out solo.
Let’s talk through your business goals, team needs, and what makes the most sense for where you are now (and where you’re headed). Whether it’s traditional group coverage or exploring the flexibility of ICHRA, we’ll help you build a benefits strategy that works as hard as you do.
🎯 Ready to explore your options? Reach out today to schedule a conversation with one of our advisors.
About Phil Rosenau
As a graduate of Germantown Academy, Phil Rosenau earned his bachelor’s degree in economics at Drew University, while also earning a minor in business management. His passion for creating and maintaining business relationships drove him to join the Prudential Advisors team, where he met Charlie and Ricardo before starting Paragon Wealth together.
Phil is a lifelong resident of Bucks County and the son of a local entrepreneur. He understands the unique needs of small business owners, takes pride in providing his clients with the knowledge to understand their unique financial situation, and helping them navigate their financial future with confidence. He enjoys spending time with his wife, Caroline, and two children, he is the current president of the MDM networking group, and he is active with the local CrossFit community. Phil is also proud to be part of the Drew University Lacrosse Legacy where he played all four years. You can find Phil here on LinkedIn, or here on Facebook.
This material contains only general descriptions and is not a solicitation to sell any insurance product or security, nor is it intended as any financial or tax advice. For information about specific insurance needs or situations, contact your insurance agent. This article is intended to assist in educating you about insurance generally and not to provide personal service. They may not take into account your personal characteristics such as budget, assets, risk tolerance, family situation or activities which may affect the type of insurance that would be right for you. In addition, state insurance laws and insurance underwriting rules may affect available coverage and its costs. Guarantees are based on the claims paying ability of the issuing company. If you need more information or would like personal advice you should consult an insurance professional. You may also visit your state’s insurance department for more information.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Great Valley Advisor Group, a Registered Investment Advisor. Paragon Wealth Management and Great Valley Advisor Group are separate entities from LPL Financial.