The Cost of Health Insurance Impacts Business Owners
A study released yesterday by LIMRA (Life Insurance Marketing and Research Association) shows that less than half of all small business owners now offer health insurance to their employees and is at its lowest level in more than 2 decades.
A spokesperson for LIMRA explains that “the recession has had the biggest impact on smaller employers’ ability to offer health benefits to their employees.” While I agree in part with this statement, I believe the real reason that many small business owners are not offering health insurance today is primarily due to the cost.
The cost of health insurance has increased more than 131% over the last 20 years. In 1993, the price of a family health plan was about $600 per month. Today, a family health plan will cost you more than $1,500 per month and the policy looks nothing like it did back then. The co-pays are much higher, benefits have been stripped down and the insurance companies have forced consumers to pay more out of pocket.
Small businesses are classified as companies with 2 – 99 employees and there are over 4 million small business owners in the U.S. Small businesses are the job creators of America and if the economy is sluggish or unemployment is high, it means that small business owners are struggling.
Ultimately as the LIMRA study indicates, the high cost of health insurance is taking its toll on small business owners and forcing them to make difficult choices; either keep the business running or offer health insurance to their employees.