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- There are a lot of benefits of providing health insurance to employees, including faster access to treatment, no-cost preventive care, and protection from large medical bills.
- Employee health insurance benefits physical and mental health as most group health plans include mental health coverage, too.
- Employee health insurance benefits extend to employers, too by reducing the number of days off taken for sickness, attracting and retaining top talent, and improving company productivity.
In the US, employee health insurance is how most working people get their healthcare coverage: 72% of private industry workers have access to an employer medical plan. It’s usually the anchor of an overall employee benefits package and enables your team to get medical care when needed without shouldering the full cost themselves.
The health insurance benefits for employees are clear to see: quicker access to treatment, protection from medical bills, and general peace of mind all contribute to improved wellbeing. But is coverage alone enough for your team? The 2025 KFF Employer Health Benefits Survey found that average family premiums have climbed to nearly $27,000 a year, yet many employees still want more targeted help: 81% of workers say that how a workplace supports mental health will be an important consideration when they look for their next job.
Let's take a look at the benefits of providing health insurance to employees (and employers) and assess how the mental health coverage offered by health insurance providers really cares for your team.
7 benefits of health insurance for employees
Providing health insurance for your employees allows them to benefit from faster access to treatment, no-cost preventive care, protection from medical debt, and plenty more. And it isn't just an advantage for your team: as a business, you'll benefit from a reduction in sickness absence and improved productivity, while retaining and attracting top talent.
1. Employees have faster access to treatment
With around one in four US adults saying they have skipped or postponed healthcare they needed because of the cost, and 41% carrying debt from medical or dental bills, it’s perhaps no surprise that affordability consistently ranks as the public’s biggest concern when it comes to American healthcare. And for the millions of people putting off appointments and procedures, that delay can significantly lower quality of life and wellbeing. One of the main benefits of employee health insurance is that your team can get seen and treated without the cost fear that keeps so many people away from the doctor, significantly accelerating their recovery process.
2. Employees can be diagnosed quicker
Most employee health insurance plans cover preventive screenings at no out-of-pocket cost (an Affordable Care Act requirement) as well as diagnostic tests like blood tests, X-rays, CT scans, and biopsies. When a health problem occurs, your employee can use your company’s health insurance to quickly get a diagnosis. And the sooner they’re diagnosed, the sooner treatment can begin.
3. Employees choose who treats them, and where
Getting medical care via employee health insurance can be a far more personal experience: carriers like UnitedHealthcare, Aetna, Cigna, and Kaiser Permanente each maintain networks of hospitals, treatment centers, clinics, and specialists. Within the plan’s network, your employee can choose where they want to be treated and by who, adding a level of control that makes the whole process a lot more comfortable.
4. Employees get access to high-quality facilities
Better health plans mean broader networks, so your employee can benefit from access to leading hospitals and specialist treatment centers rather than just whatever is closest to home. Many carriers also run centers of excellence programs for complex care, such as cancer treatment or transplants, steering patients to the facilities with the best outcomes and covering more of the cost when they use them.
5. Employees can see a specialist without a referral
When a health problem crops up, the usual course of action on many plans is to see a primary care physician first: if they think further medical care is needed, such as from a specialist clinic, they’ll write a referral. And that’s when the wait for treatment begins. Another benefit of many employer health plans is that PPO-style coverage lets employees book directly with in-network specialists without needing a referral, removing one step in the process to speed up the diagnostic and treatment process.
6. Employees can get medical care at a time that suits them
Many of the services for everyday life follow the 9-5, making it difficult to get help out of working hours. Most (if not all) employee health insurance plans include 24/7 access to medical advice: whether that’s a nurse line or the option to speak to a doctor by video through telehealth, your team will be able to get medical care at a time that suits them.
7. Employees can avoid losing income due to illness
There’s no federal requirement for paid sick leave in the US: 80% of private industry workers have access to it, but the paid days on offer are usually limited, so what happens if treatment and recovery take longer? About half of US adults say it’s difficult to afford healthcare costs, and when someone is too unwell to work, lost pay and medical bills stack up together: it’s how many of the 41% of adults who carry medical or dental debt ended up there. By having access to employee health insurance, and the yearly cap on out-of-pocket costs that comes with it, your team can speed up their recovery, meaning they’ll be back to work faster, reducing the financial cost of their health problems.
5 employee health insurance benefits for employers
Of course, it’s not just employees that benefit from having group health insurance at work: employers do too (and not just because they get health insurance as well).
An employee health insurance plan is one of those benefits that has a positive effect on the overall business: here are five benefits of company health insurance for employers.
1. Your company will see a reduction in sickness absence 🤒
With access to faster treatment and recovery support, your team will take less time off work due to sickness. This is good for every company but if you’re a small company, you’ll feel the effects of this even more. In a small team, there’s fewer people to pick up the slack when someone’s off sick – but with faster treatment, employees will return to work sooner, easing the pressure on the rest of the team. Plus, with telehealth included in most plans, your team won’t have to take time off just to attend a doctor’s appointment.
🧠 Mental health challenges are a major driver of absenteeism in the workplace: US workers with fair or poor mental health miss an estimated 12 days of work a year, costing the economy $47.6 billion annually.
2. Your company will attract top talent 🏆
Wellbeing at work is a hot topic, and it’s on the workforce’s mind: 74% of employees say improving their wellbeing is more important than advancing their career. By offering company health insurance, you’re not only signalling that you care about your employees as human beings, but you’re actively helping them to have a better quality of life. Employees are taking note of wellbeing perks and benefits, and employee health insurance is one that will help you stand out from the rest.
🧠 81% of employees say they'll be looking for mental health support in their next job search.
3. Your company’s productivity will improve ⚡
A positive side effect of reducing your company’s sickness absence, having access to good healthcare can improve your company’s output. Think about it: with people taking less time off work and generally feeling better for longer (short waiting times for treatment mean people won’t still be working while not 100%), productivity levels won’t take as much of a dip. Plus, employees that feel valued at work, tend to be happier, and happier employees are thought to be 13% more productive.
🧠 Presenteeism, showing up for work despite not feeling well (and therefore not being as productive), is the highest cost of mental health to companies and is very common: 54% of employees admit to working while feeling mentally unwell in the past year.
4. Your company will retain loyal employees 🫶
When employees feel cared for and supported, they’re happier to give more of their time and energy to the company. By committing to support your employees’ wellbeing, you’ll see an increase in engagement, loyalty, and retention. Staff turnover isn’t cheap: Gallup estimates that the cost of replacing an employee runs from one-half to two times their annual salary. Rack up multiple leavers in a year and you’re looking at a big financial hit.
🧠 65% of job leavers say their decision to quit was driven by the dip in mental health that they experienced while in the role.
5. Your company could save money 💰
Before we say it, we need to be clear that you absolutely must speak to your accountant or tax advisor to understand the tax implications of offering employee health insurance. But, company health insurance is beneficial from a tax perspective: employer premium contributions are generally a tax-deductible business expense, they’re excluded from employees’ taxable wages, and eligible small businesses can claim a tax credit worth up to 50% of premiums. Be mindful that there are lots of rules that we won’t go into here (but we do in this article solely devoted to the cost of employee health insurance), so be sure to understand exactly what the tax implications are for you and your team.
🧠 Proactive mental health screening and personal therapy sessions have the highest return on investment when it comes to supporting employee wellbeing: companies see returns of around 6.3 times what they invest, according to Deloitte research.
Health insurance benefits for employee mental health
When we talk about employee wellbeing, there seems to be a divide: physical wellbeing and mental wellbeing. But really, the two go hand-in-hand. Mental health challenges can lead to a downturn in physical health, and vice versa. With large numbers of employees saying they feel exhausted (52%), stressed (49%), overwhelmed (42%), lonely (33%), and depressed (32%), employee mental wellbeing is, and has to be, a priority for companies wanting to seriously support their workers.
So, what are the benefits of providing health insurance to employees when it comes to mental wellbeing?
🫶 Employee health insurance gives your team peace of mind
It’s no secret that life since the pandemic feels harder: on top of life’s (many) other challenges, the cost of living and general state of the world are adding to the mental burden. And for the roughly half of US adults who find it difficult to afford healthcare costs, missing time off work for a health reason (that includes dental and vision reasons, too) only adds to the problem.
Company health insurance offers a way to help ease some of the mental anxiety your team may be carrying. With covered access to medical support, they won’t have to worry about five-figure hospital bills, living and working in physical (or emotional) pain, or missing multiple days of work (and income) as a result. If something were to happen, they’ll get the care they need.
💙 Employee health insurance can remove the barriers to getting mental health support
With more than one in five US adults living with a mental illness, employers are recognizing the need to support their team’s mental health. After all, 12 billion working days are lost to depression and anxiety globally. And in the US, depression alone causes an estimated 200 million lost workdays a year, costing employers up to $44 billion.
In response, most group health plans now include some form of mental health coverage in addition to the physical health coverage, and federal parity rules require that those benefits be no more restrictive than the medical ones. Coverage ranges from therapy and psychiatry visits to mindfulness app access and self-help resources like articles, guides, and videos. With this coverage, health insurance companies are hoping to reduce the barriers to getting mental health support, letting employees get the help they need quickly.
A better way to care for employee mental health
While the idea of having mental health support in addition to physical health support sounds pretty good, the question (well, questions) we’d like to pose is: can health insurance do both well? Or is it better to enlist a specialist provider to make sure mental health is properly supported? And if you have to prioritize, which form of support is more impactful?
While most group health plans now cover therapy sessions, and many bundle in mindfulness apps and other well-marketed self-help resources, actually getting the type of treatment that works (i.e. the therapy), can be tricky. Plus, there’s a lot of small print in the provider network: only around 55% of psychiatrists accept private insurance, compared with almost 89% of physicians in other specialties, and many therapists don’t take insurance at all, leaving employees to pay $100 to $200 a session until they meet their deductible. So, people living with ADHD, OCD, bipolar disorder, autism, and many other conditions that have a huge impact on everyday life are too often locked out of getting the mental health support that is vital to their wellbeing.
Mental health support also comes in two forms: there’s the treatment of the symptoms and then there’s the treatment of the root cause. The reactive support offered by health insurance (i.e. an employee has to realize they need help to then go and get it) tends to treat the symptoms: an employee who is having trouble sleeping or is consumed by anxious thoughts may seek support once they’re feeling desperate.
But if you want to support your team by treating the root cause of mental health challenges, you’ll be helping them understand their symptoms and learn how to prevent them from worsening in the future. And that’s where a dedicated therapy solution can do a much better job.
Take Spill for example.
We partner with companies to give employees effective therapy that’s free at the point of access. The company pays a monthly sum (and yes, you really can cancel anytime: there’s no long-term contracts here) and your team can instantly access Spill therapists and benefit from next-day virtual sessions.
So far, we’ve supported over 30,000 employees with more than 65,000 sessions of therapy.
To us, that’s a big responsibility and one we take very seriously. Our five-stage hiring process means your team can access the top 13% of registered therapists, and with over 80 areas of expertise in our ranks, they can speak to someone who specializes in their struggles, including targeted support for ADHD, OCD, bipolar disorder, autism, and other developmental, behavioral, or learning conditions.
But the main point of difference is our proactive approach to mental health care.
Consider a struggling employee. With health insurance, they’ll need to first realize they need support and then take the step of actually contacting the provider. At that point, they’ll have to speak to someone on the phone who will assess their symptoms. After that, they’ll find out the recommended treatment and even then, it only might be therapy. And if it is, that therapy may start days later.
With Spill, your team will get proactive care: a short team mood survey attaches to a recurring meeting and our unique algorithm finds the people in your company who are struggling. A Spill therapist will get in touch to offer personal support and if they want, your employee can book a therapy session for as soon as the next day.
Known as Spill Safety Net, this proactive care bridges the gap between what company leaders think they know and what’s really going on. A recent report from Deloitte has found that while 67% of employees say their wellbeing worsened or stayed the same last year, 75% of leaders believe their team’s wellbeing improved. Clearly there’s a disconnect and proactive mental health support, along with clear usage data, is the only way employers can really trust that the people who need it are getting the right support.
Here’s how else you and your team can benefit from therapy with Spill:
🖥️ Add therapy to your existing tech stack with Spill’s Slack and MS teams integrations
🤫 Speak freely knowing every Spill therapy session is completely confidential
🧠 Book a one-off session or a longer course of therapy, or message a therapist
📊 See detailed usage reports to take control of your spending
🌎 Get therapy in 15 languages across eight time zones
🤝 Choose a therapist based on their gender, language, and area of expertise
✅ No exclusions: absolutely everyone can have therapy with Spill
💸 Cover a few struggling employees or support the whole team
Invest in the most impactful benefit for your team
There’s no doubt that there are a number of health insurance benefits for your employees and for you, but be sure to keep in mind why you’re offering it. Physical healthcare can be a wonderful perk to offer, but don’t underestimate the impact pure mental healthcare can have on your team and your business: it’s an investment worth prioritizing if you want to really see and feel the impact of these benefits.
