Small Business and Health Insurance

Small Business Owners Have a Lot to Think Over When it Comes to Healthcare Benefits for Employees

Many factors need to be considered by small business owners when deciding what exactly they should do about equipping their employees with health insurance benefits. Here are several issues to consider when contemplating this costly decision.

1.    What type of business do you run? According to healthcare consultant Robert Laszewski small companies which are made up mostly by the owners, such as doctors’ offices, dental practices, architectural and accounting firms should most likely provide health insurance for their employees.  “I expect they’ll continue to offer insurance through the group model because that’s the way to get tax-deductible health insurance. They also have to compete for skilled workers,” says Laszewski. However, he adds, family owned restaurants or dry cleaning shops that hire minimum wage or unskilled workers might not find it in their best interest to provide group insurance for their employees.

2.    Consider the tax benefits of providing healthcare insurance to your workers: The federal government gives tax breaks to most companies with less than 25 low-wage employees. Today the benefit can come to 35 percent of health costs, but will go up to 50 percent in 2014 for businesses that purchase their insurance through their state’s online health insurance market.

3.    Take into account what your employees actually want: Now that employees are going to be required to own health insurance, they might prefer to get that coverage from their employers, therefore encouraging their bosses to supply that coverage.

4.    Don’t forget about subsidies when deciding to offer health coverage or not: It is possible that your employees might be better off buying their healthcare coverage at a subsidized rate from the newly formed state exchanges. (Families of four with income of $92,000 annually or less will qualify for such subsidies. Low-income workers in California may be eligible for even bigger subsidies under Medi-Cal.)

5.    Do not make your decision under pressure: Laszewski says, “Do absolutely nothing until this shakes out,” he says , adding that there is a dearth of information at the moment. “I might wait a year, because what the exchanges look like and what the prices look like the first year may not be what they look like the second year,” he adds.

Small business owners should try not to panic. Although it is certain that we are entering a brave new world of healthcare culture, it is certainly not going to be as bad as you may think.

About Alison Meadows

Alison Meadows has a PHD in Economic Trends in Modern Times and is a known writer who focuses on hedge fund investments. Meadows, her husband, and three kids live in Boston, where she grew up and attended college. Contact Alison at alison[at]