Why Do Companies Need to Insure Employees?

The following are the general functions and benefits of employee insurance (employee benefits) that can be taken into consideration:

Reduce the risk of financial loss

The first benefit of insurance for employees is the risk of financial loss when employees experience accidents, illness, or even termination of employment (PHK). With employee insurance (employee benefits), both companies and employees can minimize spending or even not need to spend money on these costs.

Employee insurance premiums are quite affordable

As a business owner, you need to consider the fact that employee benefit insurance premiums are much smaller than the costs that the company must pay when employees have accidents or become ill.

Employee insurance is more flexible than individual insurance

Employee benefit insurance products can cover conditions that are often excluded from individual insurance, such as pre-existing conditions (diseases that existed before joining the insurance), congenital abnormalities, and mental disorders.

Adding company value

It is undeniable that employee benefit insurance offered by the company is a special attraction for employees and prospective employees. By having employee insurance, employees can be more loyal to the company. Moreover, if the insurance provided has complete benefits. In addition, the company is also easier to attract new prospective employees.

Employee Insurance Costs

In determining employee insurance premiums or costs (employee benefits) there are several considerations and factors. Which will then determine the amount of employee insurance premiums that must be paid by the company, including:

1. Type of insurance

This factor is the main determinant because employee insurance costs are adjusted to the insurance product taken. For example, life insurance, corporate health insurance, or pension funds. Each employee insurance product (employee benefit) of the company certainly has its own premium price provisions.

2. Number of employees

Insurance has a minimum provision for the number of employees that can be insured. Usually, the more employees, the cheaper the premium price per person.

3. Employee demographics

Demographics or the average age and gender that dominates the company will determine the amount of employee insurance costs. Because, the older the employee is, the higher the employee benefit insurance premium will usually be. This is because the risk of disease will also increase. Meanwhile, employee benefit insurance also charges higher premiums if it has more female employees.

4. Claim ratio or claim ratio

If the company already has employee benefit insurance, the claim ratio or number of claims made by employees will also affect the premium price.

5. Type of company industry and employee occupation

The higher the risk of accidents due to the company’s industry or the type of employee’s work, the higher the employee insurance costs that will be charged. This is because employees who work indoors and work in the field (eg, construction, mining, or gas) certainly have different accident risks .

Employee Insurance Cost Range

So, what is the range of employee insurance costs? The amount of premiums or employee insurance costs is certainly different between private insurance and BPJS Kesehatan. For BPJS Kesehatan, each month the premium is charged at 1 percent of the employee’s salary paid by the employee and 4 percent of the employee’s salary paid by the company.

Meanwhile, the cost of private employee insurance depends on the policy of the insurance company that collaborates with your workplace.