Small Business And Health Insurance

As if it weren’t obvious by now, the smaller the business is, the greater challenges employers face in providing quality health insurance to their employees. Even though that isn’t exactly breaking news, the downtrodden economic environment and rising health insurance premiums have amplified the issue of small business and health insurance.

A recent Small Business Administration (SBA) report showed that merely a third of firms nationwide with fewer than ten employees had health insurance benefits offered to employees in 2009. For companies with 1,000 or more workers, that figure skyrocketed to 99 percent.

Some states’ businesses with fewer than ten workers were lower yet, with only 24 percent offering health insurance benefits. That figure jumped to 93 percent for companies that employed 100 to 499 individuals.

An advertising agency owner that employs 35 people maintains the recession has taken its toll, commenting on the marketing cutbacks the firm’s clients had to make to in order to survive. The owner has taken steps to deal with tighter budgets and large increases in their small business health insurance premiums to go in a different direction with the company’s insurance provider. Part of their unique solution was to increase the company’s deductible and open Health Saving Accounts (HSAs) for their employees, which are funded by the company.

Health Savings Accounts, which are available to people enrolled in high-deductible health plans, can be shifted from job to job and are not subject to federal income tax at the time of deposit. At the end of each year, unspent funds roll over to the next, which makes small business health insurance coverage more feasible.

A recent insurance industry report showed a nine percent increase in 2011 for family coverage premiums, with single-coverage costs also increasing eight percent – a significant upward trend from 2010, when increases for families were three percent and five percent for individuals.

The report’s data also showed that average annual premiums for families had more than doubled from 2001 to 2011 – from $7,601 to $15,073. Just what everyone needs in a down economy!

Small business health insurance coverage, while important, can be elusive for some. In my particular line of business, which is a convenience store with gas and car washes, the trend for independent owners has rarely been to extend insurance coverage to employees, mainly because it has always been too expensive. Most employees who work in c-stores, outside of owners, are generally students and part-time employees to begin with, so most are not concerned about the issues of health insurance.

Most business owners, however, should be covered by quality health care coverage, as their businesses depend on their guidance and leadership on an almost 24-hour per day basis, although most owners can’t let go of the business long enough to even take a sick day! Small business health insurance group coverage is an option, provided your state’s insurance laws permit a group of “one”, which some do.