Small/Midsize Businesses Grapple with Rising Health Insurance Costs
According to our new Think Tank survey, 79% of business owners are concerned about the impact of the cost of health insurance on company profitability. And those rising costs show no signs of slowing down.
Not only do smaller businesses struggle with the actual costs of providing insurance - often magnified because they don’t have the buying power larger companies do - they also generally have less time and resources to spend figuring out this complicated puzzle.
As a result, the cost of health insurance has become so steep for some small business owners that they have simply opted out of providing health insurance benefits altogether.
59% of business owners worry that an increase in premiums would make health insurance coverage unaffordable for their employees and 47% reported concern that the cost of health insurance limits their ability to award bonuses or give raises.
While there was a time when health insurance benefits were a key driver of a potential employee’s decision making on whether to accept a job offer, that appears to be changing. Although that is more often the case for workers as they age – and with certain populations like those with existing health issues, the Enterprise survey shows that health insurance benefits are not a primary driver of attracting and retaining talent for small and midsize businesses.
When asked if they use health insurance as a primary benefit to attract and retain talent, 63% of survey respondents said no, while 37% said yes. Companies with more than 500 employees were more likely to report using insurance to attract and retain talent than companies with fewer employees.
To address this conundrum between the lack of affordable of health insurance options for employees and the desire to offer benefits packages that attract and retain the right talent, there are steps small and midsize business owners can take to meet the needs of their employees and control costs.
Although every company has different needs and is at a different point in the evolution of their employee health insurance program, there are ways business leaders can identify opportunities for smart management of spend. Business owners looking to reduce their health insurance spend should explore three key areas:
- Benefits design
- Wellness and preventative care programs
- Evaluation of access to care and actual costs
For detailed information on addressing the three areas listed above, and a list of 12 specific actions business leaders can take to control health insurance costs, download the full Think Tank survey report.