A survey by the National Federation of Independent Business (NFIB) has found that small businesses are facing issues with affordability in terms of providing health insurance for their employees.
It revealed that small business owners struggle to manage the cost of offering employer-sponsored health insurance. Specifically, 94 percent of small employers find it challenging to some degree for their businesses to manage the cost of offering employer-sponsored health insurance. Further, 48 percent reported it being very challenging, while 34 percent reported it as moderately challenging.
In addition, 49 percent of small employers have taken a lower profit or suffered a loss to pay for health insurance premium increases over the last five years. Further, 46 percent of small employers have raised prices, and another 36 percent have become more productive and efficient. Finally, 98 percent of small employers offering health insurance are concerned that the cost of providing health insurance to their employees will become unsustainable in the next 5 to 10 years.
“Health insurance has been a continuous challenge for small business owners,” said Holly Wade, executive director of NFIB’s Research Center. “The cost of health insurance is by far the biggest challenge for employers who offer health insurance and for those who do not offer it. Small employers compete for talent in filling open positions and are aware that health insurance is an important benefit for many employees and job seekers.”
Overall, 56 percent of small employers said they currently offer health insurance to employees, while 44 percent do not. Larger businesses with more employees were far more likely to offer health insurance, as 89 percent of firms with 30 or more employees offer health insurance compared to 39 percent of those with 1-9 employees. Among those that don’t offer health insurance, 65 percent said the most important reason they don’t is that it’s too expensive. Among those that do offer it, 63 percent said it was very important or moderately important to recruit and retain employees.
“Escalating prices are just one of the economic headwinds our small business owners face,” NFIB State Director Chad Heinrich said. “Nearly half of the employers who offer health insurance have suffered a loss or taken less in profit in the past five years, while most job creators find it challenging to offer employee-sponsored insurance. This is not just a problem created in Washington, D.C., legislation is actively advancing in Arizona, like HB 2290, which would only increase the cost of health care for employers and Arizona taxpayers.”
The survey also found that 79 percent of small employers said they were interested in joining an association health plan to some degree. Meanwhile, about 27 percent said they have talked with other small business owners about employer-sponsored health insurance over the last year.