With small business healthcare costs rising, what does that mean for small business owners who are struggling to offer competitive healthcare benefits to their employees? eHealth, Inc. released the results of a survey today of 236 small business customers of eHealthInsurance.com, the majority of whom have 10 or fewer employees. The results show us how small business owners feel about the state of healthcare costs and legislation, as well as what they’re doing to cut costs.
First, Are They Offering Small Business Healthcare Coverage?
We’re hearing about larger companies like Wal-Mart cutting healthcare benefits, so you might wonder if small business healthcare is one of the categories getting axed, what with budgets shrinking every month. According to the survey, the answer is no. Small businesses, it seems, continue to offer healthcare benefits, though for different reasons. Forty-four percent offer their employees medical benefits because they feel a “moral obligation” to provide these benefits to their staff. One-third of those surveyed say they do so to attract and retain solid talent. Other reasons include the tax benefits offering small business healthcare coverage provides, as well as increasing workforce productivity.
What Are Employers Paying for Healthcare Benefits?
While the scale ranges on what employers are paying per employee for these benefits, the majority (79%) spend around $200 a month per employee on medical benefits. Most of the business owners surveyed also require their employees to contribute toward the cost of their premiums. One-third require employees to pay 50% or more of their monthly premiums, while slightly more than half require their employees to contribute just 10% or less.
Affordability, it seems, is a key factor in the decision making process. In addition to affordability of the plan, small business owners also want “richness of benefits” and access to physicians. That’s not too much to ask, is it?
Cost Saving Strategies
Hoping for tips on cutting costs for small business healthcare coverage? The survey provided a few. They included:
- Raising deductibles
- Offering optional accidental or critical illness coverage
- Offering employee wellness programs
- Dropping dental or vision coverage
And speaking of employee wellness programs: not only can they reduce sick days and your overall medical costs, but they also can attract and retain great talent, as well as motivate your staff to work harder.
Work to promote a healthy culture by encouraging exercise during work breaks and taking the junk food out of the break room. And remember to shop around for the best coverage at the best rate; sometimes staying too long with one insurance provider might keep you from realizing cost savings you’d get by becoming a new customer of another company.
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