For many small businesses providing coverage can be difficult, especially when many employers are still recovering from the covid crash. One study we found from the Kaiser Family Foundation stated that 99% of employers with over 200 employees provide insurance, but only 56% of small businesses with less than 50 employees offer it.
In our research, we found that the cost of insurance was cited as the biggest problem facing the issue. In our research, we also found that more than 80% of small businesses say that the rising cost of health insurance impacted their Business. For some businesses, this meant a decrease in the amount provided by the company for health insurance; for others, it meant raising prices to compensate for the new expenses they're facing, as some businesses face serious struggles because of the cost of health insurance. This variety of solutions is most commonly present in small businesses, especially if they have under 50 employees, because then they are not mandated to provide health insurance. Meaning that business owners with less than 50 employees technically don't have to provide insurance but in the competitive job market that there is currently, it is something that employees are going to look for as they look for jobs.
Health insurance can impact employees and employers in quite a few different ways. To start, if you are working at a small business that does not offer health insurance, you are then either paying for your health insurance independently, or you are turning to Medicare and or Medicaid if necessary to help supplement the costs. When this happens, what we often see in employees is that if they are in a situation that requires them to pay more money for their health insurance, and often will want some type of benefit in exchange for not being provided health insurance through their company. The one advantage that small businesses have in this scenario is that they can make more personal decisions than larger companies with more strict regulations. It has been said many times across the history of this blog, but the human variable is often the most important one when it comes to decision-making. So the point being employers do not need to lose hope if they don't offer health insurance in terms of their ability to get workers. However, employers need to worry about making sure that they are still an attractive enough business without health insurance being offered to still staff their Business.
There are a million and one different ways to compensate for the lack of health insurance being offered in your Business; however, there are a few common ones that most businesses tend to go to because they can be universally appreciated. One of which has become even more useful since the age of covid and that is a more flexible schedule. Small businesses, so long as they're meeting their deadlines, can be much more flexible in how they get the work done as long as they reach the finish Line when they're supposed to. The good part is that both employer and employees know this, so it can create a good working relationship. Another benefit that is often seen is perhaps an increase in pay because it may be financially logical to pay an employee more so that they can afford their own personal health insurance, instead of putting it through the company. The point is that employees want to feel that they are being paid what they are worth. It is often underestimated how important validation in the workplace can be for a functional work environment and an employee's drive to continue.
The short answer to this question is yes, and there are many online independent health insurance agencies that operate specifically with businesses to create benefit-based health insurance. The type of service you're going to select will depend on your company's budget and your employee's needs. Still, these programs exist, and they exist specifically for small businesses. The best piece of advice we here at interactive accountants can offer would be for you to consult your insurance advisor or contact us for referrals to a professional insurance agent to discuss which options work best for you in this department. Some of the online resources available go into personal details and a whole range of benefits for employees. Services like these and suggestions that financial advisors like us can offer center around figuring out the best plan for each company.
For the time being, we'd like to share some final thoughts with you as we advance. For small businesses, the biggest piece of advice we can give is to stay on top of your current needs regarding employee relations and the benefits that need to be offered. Together, we can develop effective strategies that will help each business with its individual needs and hopefully learn something in the process. For the time being, feel free to reach out and subscribe to our blog or use the information you found in this and let us know what you thought about it.
Here at Interactive Accountants, helping businesses grow and succeed financially is our number one goal. We are here to help! If you are a business owner, you will need a CPA firm that understands your business needs. So give us a call or schedule a free 30 minutes consultation with our owner Matthew Shiebler, CPA. He's been practicing accounting for over 25 years now and is a business owner, just like you! If you're still not convinced yet to give us a call, feel free to look at our other blogs regarding the help we offer other businesses and practices.