Small Businesses Moving Away from Health Insurance Offerings?

The Patient Protection and Affordable Care Act has brought with it considerable debate about who should provide health insurance to Americans, and what it should cost. These issues seem to have hit many smaller companies particularly hard, and as a result the ways in which these firms choose to cover their workers could be poised to change dramatically.

The fact of the matter for many small businesses is that the cost for health insurance coverage for even a tiny number of employees has risen considerably in the last several years, and experts say they’re poised to do so again going forward, according to a report from the Associated Press. As such, many companies are now thinking about whether it would be wiser for them to change up their offerings, and instead give their employees subsidies to cover their own health insurance costs.

That’s the choice many such companies face now: With the insurance costs for their current plans rising, they’re being forced to choose between paying more (something many won’t or can’t do), paying less for more bare-bones offerings (something they don’t want to do to their employees), or providing those subsidies, the report said. The third option is growing more popular – a recent poll found that about 3 percent of small businesses will do so for 2015 – because it gives workers and businesses alike the most flexibility.

More statistics point the way
Meanwhile, it’s important to note that while critics say that the requirements for small businesses to cover their employees can be extremely burdensome, nearly all companies that would be required to do it under the law – those with more than 50 full-time employees – already do so. But that number is likely to shrink now, simply because of how considerable these costs will be, the report said. However, some experts also note that this could be good for both parties.

“We explained to them, ‘You probably are going to come out ahead,'” Ashley Hunter, owner of HM Risk Group, an insurance brokerage based in Austin, Texas, told the news agency. “‘You will get a stipend and a subsidy, and coverage will be better than what you were going to get with the group plan.'”

Owners worried about rising health insurance costs might want to think about ways they can cut their companies’ other policy premiums. By shopping around for different types of more affordable small business insurance, including liability insurance, they might be able to save thousands annually.