For small businesses, employee health
insurance causes different financial
concerns than it does for large companies. Obviously, the economies of scale
that are there for the bigger companies do
not exist for the smaller ones, says
Anthony Benevento, vice president of sales
and marketing with UPMC Health Plan.
A survey done by the Kaiser Foundation
in 2007 found that the percentage of small
businesses offering health insurance to
their employees has steadily declined since
2000. Ninety-nine percent of all businesses
that have 200 or more employees offer
health benefits, while only 59 percent of
those with fewer than 200 employees offer
health coverage. In 2000, nearly 70 percent
of all small businesses offered health insurance to their employees but, by 2007, that
percentage had dropped 11 points.
The survey also shows that almost three-quarters of the small businesses that do not
offer health insurance cite cost as the
major factor for not offering the benefit.
This does not mean that small business
owners cannot offer health care coverage.
It simply means they must find the type of
coverage that meets the needs of their
company.
Smart Business spoke with Benevento
about health care coverage for small businesses and cost effective options.
What factors should influence whether a
small business owner should offer health
insurance to employees?
Each business owner needs to make the
decision that is right for his or her company. But small businesses have to understand that they have a number of options in
health insurance that are available to them
regardless of their size. They just need to
map out an affordable strategy with their
insurer.
One of the deciding points in determining
whether a small business owner will want
to offer health insurance to his or her
employees is the importance the owner
places on attracting and keeping top
employees. After salary, health insurance is
one of the biggest factors in terms of hiring
and retaining the best employees.
Should the cost of insurance be the deciding
factor for a small business?
Rather than looking at health insurance
coverage as an all-or-nothing proposition,
small business owners need to look at various plan designs that can fit their budget.
Small business owners should know there
are many options for their needs.
The cost of health insurance is a major
factor, but the business owner also has to
look at other costs if health insurance is
not offered to employees. There is, for
instance, the cost of turnover. Buying the
right health insurance for your company is
less expensive in the long run than having
a constant cycle of turnover, an extended
training period, more turnover and yet
more training of new staff. A business
owner has to think about how much that
pattern costs when determining whether a
company can afford health insurance for
its employees.
How can an insurer meet the specific needs
of small businesses?
You have to deliver a product that is
designed to address the unique challenges
of small businesses. Such challenges
include increased price sensitivity, the
desire for additional health and wellness
programs and the need for dedicated customer service by representatives who not
only understand plan designs, but also the
unique needs of small businesses.
What should a small business owner look for
in terms of coverage?
You would want coverage that is comprehensive in scope, but not overwhelming in
cost. Many small businesses do not think
that they can afford to have coverage that
includes such things as wellness programs,
vision benefits, online tools, EAP services
and other value-added benefits such as a
global emergency program. They do not
think they will be able to get the kind of
specialized customer service that a major
employer receives. These types of benefits
can be bundled by a health insurer and
offered in a way that can be affordable for
companies of all sizes.
Small business owners should also realize that advances in online access for
employers can make service more complete and accessible. Many health plans
have systems available that do not require
an employer to talk with a health plan representative on the phone in order to perform tasks such as verifying benefits information, processing new enrollments,
adding or removing dependents for coverage and creating temporary ID cards. The
ability to perform those tasks when you
want to also represents a form of ‘savings’
for the small business owner.
How can health care coverage be affordable
for small businesses?
It is just as important for a small business
owner to find coverage that helps make his
or her employees as healthy as possible as
it is for the large business owner. It is
important to offer plans that cover smoking cessation products or discounts for
products such as fitness centers, dance studios and sporting goods stores. Again, it is
a case of doing what you can to hold your
employees and to keep them healthy. In the
long run, they will be more productive and
actually save money for a business owner.
For many small businesses, not investing
in health care coverage is a savings they
really can’t afford.
ANTHONY BENEVENTO is vice president of sales and marketing at UPMC Health Plan. Reach him at [email protected]
or (412) 454-7826.