Seven out of 10 small business decision-makers in the U.S. are concerned about their company's ability to provide affordable health insurance coverage, with two-thirds worried about the effect this has on their ability to attract and retain top quality staff.
This growing level of concern among U.S. small businesses has been highlighted in a new survey commissioned by insurance company Aflac which also found that half (49 per cent) believe that they cannot attract and retain staff without offering competitive health benefits.
The survey of 501 small business decision-makers found that many see a direct correlation between profitability and current health benefit offerings, with more than a third (36 per cent) reporting that their current health benefit offering has negatively affected business.
A quarter (24 per cent) said that rising costs had affected their profitability, one in 10 (11 per cent) said it damaged their ability to attract new employees while seven per cent said they had lost good employees as a result of not being able to provide benefits.
"Quality health insurance benefits are often key to recruiting and retaining good employees," said Paul S. Amos, II, Aflac's chief operating officer.
"Because small businesses are more susceptible to premium increases, it is critical that small business owners and management are well-informed of the numerous health benefit options available."
But despite rising costs, six out of 10 (58 per cent) of those questioned agreed that "it is important to financially help employees with health challenges and medical emergencies."
Among the six out of 10 small businesses that offer some type of benefits to their employees, an average of half (52 per cent) of the employee base receives health care coverage, with these employees paying an average of 31 per cent of their health insurance premiums.
But while 21 per cent of these employees pay zero per cent of health insurance premiums, 63 per cent pay half or more.
The extent to which rising costs are impacting employees is clear from the fact that nearly half (46 per cent) of those questioned reported that increasing health care costs have negatively impacted their employees' wages and four out of 10 (42 per cent) said that annual increases in health benefits have made them decrease the benefits they offer.
In response, almost four out of 10 firms (38 per cent) have taken some action around their benefits last year and a third (34 per cent) anticipate taking some action in the coming year.