FAQ: Should Small Businesses Purchase Health Insurance?

Posted in Health Insurance , Small Business Health Insurance

October 3rd, 2009

If you’re a small business owner, you’re probably wondering if you should buy health insurance for your employees.

Employee Insurance Plans

Small businesses should buy health insurance for their employees if they want to be more competitive when it comes to hiring and retaining employees, and building their loyalty. If you have health insurance to offer a potential worker, he or she is going to be quite tempted – and if they’re interviewing with other businesses which don’t offer attractive health insurance plans, they’re going to look upon your offer more favorably. In today’s society, everyone with health insurance feels extremely lucky to have it. The horror stories of people getting sick or injured without health insurance are enough to scare anyone.

Help for Small Businesses

Statistically, the smaller the business, the less likely it will be to offer health insurance to its employees. It’s simply a fact that health insurance, unlike life insurance or auto insurance, costs a small fortune, and so small business owners will be less able to absorb the cost of their employees’ health insurance. There are, however, many different programs available on a state-by-state basis that seek to help small business owners afford health insurance. One such law that is in the works would allow small businesses to band together across state lines and form bigger numbers from which to negotiate with the insurance companies on a stronger footing. Employers can also think about getting health insurance for their employees in conjunction with Health Savings Accounts (HSAs) and high-deductible plans, which seek to help people with minimal, bare-bones health insurance.

Small businesses need to think long and hard about whether to offer health care to their employees. It makes for a very grateful workforce, but it takes a big piece out of the company’s profit margin.