I know a small business owner whose son spent months in traction after falling off a balcony. This unfortunate accident was unimaginably stressful for the family for personal reasons. The associated medical costs also had the potential to derail the entrepreneur’s business. Luckily, the health insurance he uses for his business was able to cover the expense and get his son the necessary care.
Health insurance is such a dire issue for many small and midsize business owners that they often struggle to obtain the kind of coverage that enables them to grow their firms in line with their ambitions. Part of the issue is that many entrepreneurs fail to understand the connection between proper health insurance and strategic growth, and part of the issue is that they do not know how to find good coverage.
It’s not as though the U.S. health care system makes any of this easy to navigate. Putting aside the dubious footing of the Affordable Care Act and its contentious politics, people have legitimate material concerns that require innovative solutions.
According to a recent Gallup poll, 55% of Americans stress about health care as their top worry, more so than 14 other national issues including the economy, terrorism and the environment. The Centers for Medicaid and Medicare Services (CMS) found that in 2017 health care expenses rose 3.9% to $10,379 per individual or $3.5 trillion total for the country. Worse still, according to a Congressional Budget Office report, there were 28.9 million uninsured Americans in 2018 — an increase of more than 1 million people from 2016.
The good news is that getting proper health insurance for your business is possible. Even better, the process does not have to make you sick to your stomach. The bad news is that if you ignore the issue, chances are high that your firm will suffer for it in the long term. Here’s what you can do to get your company on the right track.
First, start thinking about providing good health insurance for your business as a competitive advantage that manifests as cost savings, talent development and reputational goodwill.
Without affordable health insurance, any serious injury or illness that befalls you, your key personnel or their families could result in costs that prevent your business from achieving any number of goals. Missed production deadlines or sales hurdles have been known to occur due to absences while tending to family, instead of having a paid professional handle the care. At least as common is the inability to obtain business loans and invest in new resources like technology or office space due to over-extending on personal credit to pay medical bills.
Not only does proper health insurance mitigate those potential financial downsides, but it can attract coveted workers to your firm. Small and midsize business owners are notorious for underestimating how much skilled individuals value the rarity of a good health insurance package. Furthermore, once they join a firm offering good insurance and begin using it for themselves and their families, they are more likely to both stay on the team and focus on adding value to the business, because they will worry less about covering medical bills.
Reputational goodwill by way of health insurance also is a vastly overlooked asset. Businesses are under heavy public scrutiny to show that they are good corporate citizens that contribute something more to society than products and services for sale. All else being equal, firms that are seen as ethical employers — in part by providing health insurance that meets the needs of their workers — are better positioned to receive media accolades than rivals that risk social criticism, and lost revenue as a result, by failing to support workers with health insurance.
A good option for small and midsize business owners is to obtain quality affordable group health insurance for their firms by tapping a Professional Employer Organization (PEO). PEOs are third-party entities that allow firms to outsource much of the work of providing this employee benefit and also can provide retirement plan benefits, human resources and payroll services to your workers. You also can find additional third-party entities that partner with PEOs to provide your firm with discounted access to group insurance packages covering medical, dental and vision, etc.
Through a PEO that operates nationally, your firm can enjoy the scale of many other firms like yours participating in the group health insurance package, which in turn can lead to lower costs for everyone covered than were each firm to try obtaining its own standalone package without the PEO. In addition, a PEO can help you stay on top of changes to the U.S. regulatory landscape and remain in compliance with considerably less time commitment than would be required with a direct-to-insurer option.
Of course, there is not yet a proven silver bullet for all of the nation’s health care challenges. But rather than suffering from poor health insurance choices, small and midsize business owners do have resources to help solve this issue without breaking the bank or diverting focus from their core competencies. That’s a prescription for success.