What’s the advantage of group health insurance over individual coverage?

By pooling employees together in a group plan, your premiums are likely to be lower than if you bought individual plans for each employee. And as the employer, your share of the premium cost is usually tax deductible. In addition, the employees’ share of the premium can be paid with pre-tax dollars, which lowers their taxable income—and your payroll taxes.

Conversely, individual plan premiums are determined by individual risk, which is more likely to result in a higher cost. And an individual’s medical expenses must exceed 7.5% of their adjusted gross income to be tax deductible (and only the amount above 7.5% is deductible).