As the economy continues to tank so do the number of Americans without health insurance?and the number small business owners who can afford to insure their employees.
A recent survey by the NFIB Research Foundation, a small business advocacy group, showed that only 47 percent of small business owners offer employee health benefits. Those employing 20 or more people are more than twice as likely to offer employee health benefits as those with fewer than 10.
The survey found that the low numbers are primarily the result of new small businesses opting not to cover employees. Most small businesses who offer benefits have offered them for a while and are reluctant to drop them for fear of losing good employees.
?It?s much better for employee morale if a small-business owner never offers health benefits, than it is to offer them and then be forced to take it away because it is too expensive to continue,? said William J. Dennis, NFIB?s senior research fellow. ?Small-business owners experience considerable turmoil in their early years. They often experience cash flow problems and are reluctant to incur additional expenses such as health insurance. What?s new to this picture is that it appears that new small-business owners are waiting longer or choosing not to offer health insurance benefits to their employees at all.?
The fact that new small businesses are choosing not to offer benefits is a disturbing trend because of the swift turnover of the small business population. If the trend continues, the number of employers who never offer benefits will increase. And that will hurt small businesses because it will limit thet talent pool from which they draw.
What Can Be Done?
Small businesses aren?t alone in struggling with the cost of health care (and premiums) in the current economic climate. The U.S. Census Bureau reports 47 million people, or 15.8 percent of the U.S. population, were without health insurance during 2006
Unfortunately for the small business owner, new legislative approaches to help the uninsured may actually hurt them. One popular option is the "pay-or-play" mandate, in which employers are required to either provide health insurance for their employees or pay a penalty to offset costs the government incurs to provide health care for the uninsured. The rules likely would only apply to full-time employees.
Proponents say such mandates could significantly reduce the ranks of the uninsured, since the vast majority of the uninsured are in families with at least one full-time worker. Many of these are low-income families, suggesting that such measures could benefit the working poor.
Opponents argue that many low-wage workers will just be paid less, reduced to part-time or laid off to offset the insurance costs.
In their paper, "Employer Health Insurance Mandates and the Risk of Unemployment," researchers Katherine Baicker and Helen Levy found several factors affect the extent to which such mandates cost more jobs:
? Cost of the insurance.
? How much of the cost of coverage will be passed on to workers via lower wages.
? How many uninsured workers have earnings so close to the minimum wage that their wages cannot be reduced enough to offset the cost of the new coverage.
The authors found that the mandate would still leave 54 percent of American workers without coverage.
?The vast majority of those who benefit from pay or play mandate live in families with incomes twice the poverty line or more and, depending on how coverage is determined, the mandate will leave a significant share of the working poor ineligible for such benefits either because their hourly wage rate is too high or they work for smaller exempt firms,? the authors wrote.
Most experts agree that such mandates are bad for small businesses. Employers are faced with hard choices. In the NFIB poll, only 20 percent of small employers said they would simply provide the insurance as required. Many more said they would either cut jobs or move more employees to part-time status.
Moving people to part-time work is a particularly attractive option to small business owners. In fact, how part-time employees are treated is a key influencing factor on whether small businesses support pay or play legislation.
According to NFIB, ?The treatment of these employees will alter relative costs in one direction or the other, providing small employers? strong relative incentive to change.?
Small business experts agree that if part-time employees are covered by a mandate, most employers will respond by simply eliminating jobs, adding to the jobless rate and doing nothing for the rate of uninsured.
Small business owners have always faced an uncertain future but the current economy and the health care crisis make this an extremely tough time to take the startup step.
Melissa Mashtonio writes for Manta.com, the authority for finding 45 million free small to large company profiles worldwide?and their related industries and products. Manta's Small Business Center features thousands of how-to-guides for small business owners.
Small Business: Ten Traits All Small Business Owners Must Have To Be Successful
Winning in Small Business is as hard as running a race in the Olympics, actually I think harder, but the interesting fact is that the traits to succeed in small business are the same ones athletes use to succeed in any sport. Essentially the ten traits small business owners must have to succeed are the same ones we all must have if we ever think that we will achieve something in our lives.
Improve And Upgrade Your Ride With Truck Performance Accessories
Make no mistake about it; your truck is an extension of who you are. You put a lot of work into making sure your ride projects exactly the right image for your personality. But despite all of your efforts, do you still feel that your truck is missing that little something extra? In this article, we?ll give you a few easy suggestions on how to improve and upgrade your ride with truck performance accessories.
Underprepared Students and Small-Scale Program Implementation Are Key Inhibitors to Improving Student Retention
Higher education thought leaders point to early assessment and large-scale deployment as solutions to effectively combat student attrition.
Sandals ? Theses Shoes Were Made For Advertising
Any given day in summer, strolling down any given street, people are looking for ways to escape the heat Some stay locked inside their air-conditioned abodes
Picking Decorative Accessories For The Zen Decorating Theme
Decorative items are the icing on any interior design theme and will help pull your Zen decorating theme together. In keeping with the look of a meditation garden, you should choose peaceful and serene decorative items that have a minimalistic feeling. Your Zen style decor will really shine when you add chosen complimentary wall art, knick-knacks, and pillows.
A Not-So-Ordinary Clothing Item: Hats
Hats have been around in some form or another for many centuries - millennia actually. Archaeologists have discovered remnants of ancient headgear that goes back thousands of years. In the very earliest times, hats were all handmade, and often the best designs and materials were reserved for the use of royalty and the well-to-do. The Industrial Revolution in the west brought with it the assembly-line, mass-production of all types of clothing, including hats.
Your Talent Manager offers an affordable full service outplacement career services for small to mid size businesses. Receive a FREE copy of our e-boo
Your Talent Manager, a virtual full service outplacement and career coaching firm, is announcing its services to managers and executives of small and mid size companies. Your Talent Manager offers a low cost alternative to traditional higher cost outplacement firms. We provide affordable, customized, user-friendly, results driven outplacement programs where you only pay for the services your laid-off employees need , want and use.
Fee-Refund Offer Makes Debt Management Even More Appealing to Small Businesses
'SURE' program can supplement debt savings negotiated by PSI.
The Magic of Thinking Small
Hey!Many of you might disagree and I'm prepared for that.Many 'guru's' might say "Mike, you're wrong.
VW Polo - A Small Car With Big Plans
There was quite a commotion going on today outside our house As it is normally so quiet you can hear an Ant?s footsteps I thought perhaps it would be a good idea to see what all the fuss was about, just in case there was some kind of apocalyptic alien invasion or such like