Many small-business owners want to offer employees health insurance but don't. Here's what's holding them back. | hioscar Blog | Oscar
Many small-business owners want to offer employees health insurance but don't. Here's what's holding them back.
Small businesses are struggling to remain competitive when it comes to hiring top talent.
Employee Health BenefitsTips for Small Businesses
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The Great Resignation of 2021 is still going. Competition for talent is getting tighter. Labor shortages remain a critical challenge for small businesses across the country.
According to the National Federation of Independent Business' October monthly jobs report, 49% of small-business owners reported job openings they could not fill. (1)
This is true for businesses like 9Round Fitness, a kickboxing studio in California. Ashley Richardson, who owns two franchise locations, has been having a hard time hiring new employees for months. Recently she lost her top employee to a company that offered better benefits.
Conversations with small-business owners and results from a survey by Cigna + Oscar gave insights into the current business climate. Here's how businesses can overcome their challenges to stay competitive on healthcare benefits.
Small businesses struggle to offer benefits
Richardson said she tries to remain competitive by offering her employees free gym memberships and a 401(k). She also recently raised her starting wages.
She said that her small business can't afford to offer healthcare.
She was echoed by many of the respondents in Cigna + Oscar's proprietary survey, fielded in July along with Insider Studios and Dynata, a first-party data and insights platform provider. The survey found out how small-business owners/benefits decision-makers and employees feel about healthcare.
The majority (59%) of small-business owners and benefits decision makers said they couldn't compete with larger employers on healthcare benefits offered to employees.(2) And 60% said they limited insurance-plan options offered to employees because of costs.(2) More than two-thirds said they felt that health coverage was not built with them in mind.(2)
Amanda Ma, the CEO of California-based Innovate Marketing Group, has 10 full-time employees. She offers healthcare as it's an industry standard and helps her company stay competitive. But she wishes her vendor offered better rates, better coverage, and lower copays and were more user-friendly.
"There are usually long wait times," she said. When she reached out to her vendor to fix an issue with an employee in the system, "it took two weeks to troubleshoot."
Logan Allec, a CPA and owner of the personal-finance site Money Done Right, has had similar issues with his broker and has to spend a lot of time explaining the benefits to his employees himself.
"I'm fairly confident that if I were a larger business, I would get better service," he said.
Sixty-four percent of surveyed employees expressed satisfaction with their current health plan, while only 57% of owners and decision-makers were satisfied with their options.(2) The gap in satisfaction with their company's current healthcare plan suggests that owners know there are better options that they just can't afford to offer.
In fact, 45% said they couldn't increase salaries because of health-insurance costs.(2) At the same time, many small businesses like Richardson's have had to raise wages to stay competitive during the labor shortage.(1)
Cost variables make healthcare hard to navigate for small businesses that are facing challenges on all fronts.
"The healthcare system, in order to become palatable for small businesses, has to be something that we can budget for, something that has control around it so it's not overwhelming," Richardson said.
How small businesses can offer health insurance
Many small-business owners know the value of offering health insurance. It can help attract talent, retain employees, and build trust between employees and employers. Plus, small businesses that offer health insurance are eligible for tax breaks.
In the survey, 72% of business owners and decision makers said they would switch plans to offer better benefits to employees if they were available at a lower cost.(2)
Cigna + Oscar offers solutions that are tailored toward small businesses. Their variety of plans include access to Cigna's two provider networks, low-cost prescriptions that members can refill right from their phones, and virtual urgent-care appointments (and even virtual primary care in some markets). Oscar's digital member-focused experience make administration and managing employee benefits easy.
Allec wants his insurance to be more understandable and to have more support from his broker so everything doesn't fall on him.
"It'd be great if employees could look at some kind of interface or website or app that explains their coverage in easy-to-understand terms," he said. "I have a million things to do in my business, and I don't need a million and one by having to explain coverage options to my employees."
Oscar members get a dedicated Care Team to help them troubleshoot any issues, get their questions answered, and get the most from their plans 24/7.
During the challenging business climate, it's essential for small businesses to have a health-insurance provider that can help attract and retain talent.
Cigna + Oscar coverage is insured by Cigna Health and Life Insurance Company. CA: benefits administered by Oscar Health Administrators. Other states: benefits administered by Oscar Management Corporation. Pharmacy benefits provided by Express Scripts, Inc. Cigna + Oscar health insurance contains exclusions and limitations. For complete details on product availability and coverage, please refer to your plan documents or contact a representative.
Sources:
1 NFIB. "Small business optimism decreases, owners uncertain about future business conditions." October 2021.
2 Cigna + Oscar, Insider Studios, and Dynata. "Small business attitudes toward healthcare and benefits." July 2021.
