Fewer small businesses offer health insurance

More than half of small businesses (56 percent) do not offer a company health care plan to employees, according to a recent survey conducted by online payroll service SurePayroll. The national survey defined "small business" as a company that employs one to 100 people.

The number of small businesses offering health care plans has decreased dramatically during the past two years; since SurePayroll's 2006 survey, there has been a 32 percent decrease of small businesses offering health insurance, with most respondents citing cost as a reason.

SurePayroll President Michael Alter believes the struggling economy is a significant cause for the decrease.

"It was tough before, and now it's getting even tougher for small business owners to offer health insurance," Alter says. "The cost of doing business is going up; health insurance premiums are going up. And although many small businesses have actually seen slight growth during this so-called recession, talk of economic doom hangs over their heads. To be confident their businesses will survive, many owners feel they have no choice but to cut costs wherever possible, including health care coverage."

Small business owners are split regarding a solution. About 38 percent believe small business owners should be responsible for providing health insurance to employees, and about 62 percent do not share that belief. Some support an increased government role regarding health care.

"I would prefer a government-funded plan supported through personal tax increases," says one survey respondent. "Until that happens, I think business owners should cover health care insurance costs for their employees and families."

Others oppose government or business involvement.

"Health care is the responsibility of the individual, not business or the government," says another survey respondent. "Small businesses already shoulder the burden of tax and child support collection and payment, in both time and money. Adding health care to that is crippling for a small business."

However, not offering health care also could negatively affect businesses; some respondents say they have had a job candidate turn down an employment offer with their companies because health care benefits were not offered.

"Even though it is increasingly difficult to offer health care benefits, a company that offers little or no health care benefits is likely to put up an instant red flag for potential talent," Alter says. "Footing all health care costs on their own is simply not an option for many people, and businesses could find it harder to interest talented individuals without offering benefits."

Date : 5/9/2008