When it comes to health benefits, small businesses are keeping up with big companies
- A new survey from United Benefit Advisors (UBA) found that small businesses aren't far behind large employers in providing health benefits. Survey results from Small Businesses Keeping Pace with Nationwide Health Trends show that employees at small organizations pay an average of $3,557 annually for the cost of their coverage, with their employers paying $9,474 of the balance. By contrast, employees at large companies pay $3,378 annually, while their organizations pay $9,727. The difference is only 5.3%.
- "Keep in mind that relief such as grand-mothering and the PACE Act helped many of these small groups stay in pre-[Affordable Care Act] plans at better rates, unlike their larger counterparts," UBA President Peter Weber said in a statement. "Generally speaking, however, small businesses are not cutting corners with their coverage."
- Weber recommends that small employers benchmark their health plans against similar size organizations and communicate how competitive they are in national costs, co-pays, deductibles and other medical expenses.
The UBA study may show little cost difference but a 2016 report by the Employee Benefit Research Institute that found that healthcare coverage by employers with fewer than 100 employees had dropped to 24%, and those with fewer than 10 workers dropped to 36%. Naturally, healthcare is a big expense that not all small businesses feel they can afford.
But the Zenefits Small Business Benefits Benchmark Report also found that small businesses contribute 25% more to benefits plans' monthly premiums than is required. These studies show that small businesses are keeping pace with larger organizations, an effort perhaps driven by the need to retain workers who are looking for strong benefits packages.
Small businesses also rate high generally. The Aflac Happiness Report found that 75% of employees are happy working for a small organization, largely driven by the willingness of such organizations to express their appreciation of their employees. Smaller businesses also tend to give employees more freedom in defining their work, another cornerstone of employee engagement.