Will Small Businesses One Day Eschew Health Insurance?

Over the last several years, there has been a lot of attention paid to the ways in which small businesses in particular deal with the ins and outs of the Patient Protection and Affordable Care Act’s coverage requirements, and the costs that come with compliance. However, some experts are beginning to wonder whether there might come a day in the relatively near future when employer-sponsored health insurance is a thing of the past.

The fact of the matter is that most small businesses have long provided their workers with at least some sort of health insurance policy, but there may be a trend away from that over time, according to a report from the Brookings Institution. Data shows that 68 percent of companies of all sizes offered health insurance to their workers as recently as 2000, but that number fell to just 55 percent last year.

And what’s interesting about those numbers is that, for the most part, it was small businesses that did the cutting of benefits during that time, the report said. This stands to reason, to some extent, because businesses with more than 50 employees are required by law to offer coverage, while those with 50 or fewer are exempt from that rule. As such, many smaller companies – mostly those concerned about their bottom lines – have taken the opportunity to allow their employees to look elsewhere rather than continually pick up the check for coverage.

Other trends could be troubling for workers
Meanwhile, it seems that even the smaller companies that offer their workers health insurance plans are making it a little more difficult to afford them, the report said. More are shifting their workers to plans that give them insurance, but also do so at a higher cost in the form of increasing deductibles and co-pays. At this point, about 1 in 5 small business workers have such plans in place, up from almost none just a decade earlier.

Owners who are worried about insurance costs across the board for their companies might want to keep in mind that their expenses for all coverage might not be as affordable as possible. If they take the time to shop around for lower-cost small business insurance policies, such as those for liability insurance, they may be able to free up thousands annually that can instead be devoted to health insurance benefits.