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Sarah Brooks

Sarah Brooks is a freelance writer living in Glendale, AZ. She writes on health insurance, small businesses and personal finance.

Sarah Brooks has written 27 articles for SB Informer.
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Is Health Insurance a Benefit for Your Small Business?

Sarah Brooks

May 27, 2014


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Think about what makes a job appealing to you.

It's most likely the type of work, followed by the pay and other benefits like vacation time, health insurance and hours, and then the overall atmosphere. We spend most of our waking hours at work, so of course it needs to benefit you in some way other than just a paycheck.

Have you ever considered working for a small business?

Small businesses most definitely provide some attributes that large businesses can't - such as fewer politics, a close-knit relationship with other employees and possibly more flexibility in terms of paid time-off and telecommuting.

But what about health insurance?

Unfortunately, the number of small businesses offering health insurance to employees is decreasing.

A report from the Robert Wood Johnson Foundation found that between 2000 and 2011, the number of small businesses providing insurance went from 47 percent to 38 percent.

Of course, employer-funded health insurance plans aren't the only options out there.

You can get your own individual plan for you and your family or short-term health insurance if you're in between jobs.

 

Pros of offering health insurance

Among the benefits of offering health insurance for your employees:

  • Get better employees working for you - It's a fact - companies that offer better benefits to employees can be pickier and attract the best candidates. If the overall pros outweigh the cons, including providing good health insurance, qualified candidates will want to work for your company. This allows you to pick and choose who you want working for you.
  • Your employees will be healthier - Many people avoid going to the doctor because without health insurance, it's expensive. If your employees aren't going to the doctor and getting the proper medications when they're sick, they're going to take longer to recover and be out of work for a longer period of time. They also run the risk of infecting everyone else in the office.
  • Tax advantages - You're allowed to take an income tax deduction for the health insurance you provide for employees. You also pay less for your own health insurance as a business owner by including yourself in the package.

 

Cons of offering health insurance

Some small business owners may consider these factors as liabilities in offering health insurance:

  • It's expensive - Let's face it - providing health insurance for employees is costly. Health care continues to rise over the years so it's hard to plan financially for this expense. If costs go up even higher, some small businesses will not be able to afford health insurance without going out of business.
  • Administrative costs - It takes work getting health insurance benefits in place, and is an on-going task as new employees are hired. Though most health insurance companies do provide someone to help with all of this, the questions will first come to you or someone else in your office. You may need to hire an extra person to help take care of this, which of course, is an extra expense to you.
  • Lack of choices for employees - Some people have gone to the same doctor all their lives, and they may not want to switch simply because your plan doesn't have their doctor in their network. People like to be in control of their medical coverage, and as a business, it would be impossible to make everyone happy. This may cause more frustration amongst employees than it would to just not provide health insurance at all.

 

Deciding whether or not to provide your employees with health insurance is up to you.

You could always give it a try for a few years and see how it goes. Are you getting more qualified people working for you? Do the tax advantages make the overall expense not as bad?

As a small business owner, you'll never know unless you try.


                   



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