The Benefits of Benefits

Many small business owners believe they can’t afford health insurance for their employees. But experts say a growing number of options can make it possible—which is good news for employers who want to retain productive employees.

When a firm offers benefits, it decreases the probability of an employee leaving in a given year by 26.2 percent, and increases the probability of staying an additional year by 13.9 percent, according to a recent study by the Small Business Administration’s Office of Advocacy.

For lower costs than traditional plans, businesses can now pick from a variety of employee health-insurance options, such as health savings accounts, mini medical plans, self-insured plans, partially self-insured plans and health reimbursement arrangements.

"[Mini-medical is] an alternative to not having insurance at all—a very good alternative, actually," says Pete Embry, an insurance broker with Paychex in Rochester, N.Y., who deals with Southwest Florida clients. He says a policy that normally could cost a business $300 a month per employee can in some cases be bought for as little as $50. Insurance companies that offer these plans do not pay for catastrophic care.

"It’s not major medical," he says. "If you had to go in for brain surgery and it cost $250,000, this insurance wouldn’t cover that kind of thing."

USNow provides this "managed limited benefit plan," which offers employees basic healthcare coverage, a prescription card, a national PPO network, and healthcare discount services programs.
Embry says the rates charged in these plans depend upon the age and gender of the employees.

"Older people with kids are more expensive than single males. Women cost more than men for healthcare insurance," he says.

 

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