Health care costs are the biggest concern for small business – again


In ‘Sunset Boulevard’, fading screen actress Norma Desmond famously said, “I am big. It’s the pictures that got small.” Many U.S. employers face a similar juxtaposition: Their companies might be small, but their impact on our nation’s economy is big – huge even. According to the U.S. Small Business Administration:

  • The 23 million small businesses in America account for 54 percent of U.S. sales.
  • Small businesses provide 55 percent of all jobs and have accounted for 66 percent of all new jobs since the 1970s.
  • There are more than 600,000 franchised small businesses in the U.S. and they account for 40 percent of retail sales and provide jobs for 8 million people.

29 years at the top

A recent survey by the National Federation of Independent Business revealed that leaders of small companies have a lot on their minds. Among those concerns are the economic outlook, burdensome regulations and tax reform. But sitting squarely at No. 1 for the 29th consecutive year – just short of three decades – is rising health care costs. This echoes the results of the 2014 Aflac WorkForces Report, which revealed that controlling health care costs is the primary objective of 49 percent of employers.

Changes to our nation’s health care system and the increased price of health insurance mean employers continue to struggle with their health care costs. For years, many small employers have shared the pain with workers by eliminating some benefits and passing the cost of others on to employees. In fact, over the last 10 years, the average premium for employer-sponsored family health insurance has increased by 69 percent.

Given that the still-recovering economy has meant years of lowered or eliminated raises, bonuses and other perks for U.S. workers, the increased cost of health care combined with reductions in benefits has been hard for employees to absorb. It’s no wonder that 57 percent of employees surveyed as part of the 2014 Aflac WorkForces Report said they’d be likely to accept jobs with slightly lower pay but better benefits. That’s bad news for small companies, especially when you consider that hard-working, experienced employees are top-notch business assets. So what’s a company to do?

The voluntary solution

One simple solution is introducing or adding voluntary benefits to their employees’ health care options. Fully 50 percent of workers at small companies who don’t have access to voluntary insurance at their workplaces say they’d be likely to apply for coverage if given the opportunity.

Voluntary, or supplemental, insurance policies work with major medical insurance to help provide an extra layer of financial protection for employees. Because premiums are usually fully paid by workers, companies can add voluntary benefits to their benefits options with no effect on their bottom lines.

Unlike major medical insurance, voluntary policies pay cash benefits directly to employees if they’re sick or injured. At the same time, they give employers the opportunity to strengthen their benefits packages without adding to their benefits costs. As an added bonus, voluntary insurance is simply good business: Workers with voluntary coverage are more likely to be extremely or very satisfied with their benefits than workers without.

If you’re a small-company leader who’s tired of having health care costs at the top of your list of business concerns, consider the opportunity voluntary benefits offer your company and the peace of mind they help provide to your employees. It’s a small step that offers big rewards.

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