Small Business Owners May Have Less Health Insurance

These days, small business owners in particular have a lot to keep in mind, but this may be especially true when it comes to the ways in which they are able to afford health insurance for themselves.

With the Affordable Care Act's coverage mandate set to take effect in just a few months – at the start of 2014 – many small business owners may have their obligations under the law at the front of their mind as they approach the deadline, but pay little attention to the ways in which they are able to cover themselves, according to the new My Business, My Health study from Cigna. In all, about 25 percent of all small business owners do not have their own health insurance, and currently, three in five small business owners who do not have health insurance coverage of their own say that they put their companies' priorities ahead of their own, and in fact, 82 percent of these respondents say that they don't have health insurance for themselves because it's too expensive.

Interestingly, though, this fact was somewhat disconnected with reality because more than four in five also overestimated the actual cost that health insurance would carry for them, while about one-third underestimated the actual cost of healthcare, the report said. Perhaps because of these facts, three in five said they believe they are either reactive or altogether inactive in dealing with their health in general, meaning that they either don't go to the doctor at all, or only go when they feel they absolutely have to.

"Clearly the stakes are high for this population to stay healthy in order to stay successful in business," said Lisa Lough, vice president for Cigna Individual and Family Plans. "However, a majority of this group readily admit that their personal health takes a back seat to the demands of their business. … America's small business owners and entrepreneurs – the independent contractors, sole proprietors and freelancers – power the economy. To stay healthy and successful, self-employed workers need to plan for their health care needs and think more about health care in terms of prevention, instead of reaction."

Some may be held back by student loan debt
However, many Americans who dream of running their own small businesses may have significant difficulties in doing so because of the large amounts of debt they have been forced to take on as a means of completing their college educations, according to a separate report from Bloomberg Businessweek. Data from the U.S. Small Business Administration shows that self-employment among those aged 65 years old or more rose 24 percent between 2005 and 2010, while those for people 25 years old and under dropped 19 percent.

The reason for this may be that the percentage of 25-year-olds who have student loan debt has risen appreciably in the last decade, up to 43 percent in 2012 from just one in four in 2003, the report said. The Federal Reserve Bank of New York recently found that the average size of the balances those people carry, meanwhile, has likewise almost doubled, to $20,326 from the previous $10,649.

Current or hopeful entrepreneurs intent on successfully managing their own companies may want to consider the ways in which small business insurance policies will affect them. This includes more than just health insurance for themselves and their workers, such as general liability insurance policies or those for workers' compensation.  Taking these additional costs into account can mean the difference between success and major financial difficulties that can endanger the state of an entire company.