The US is trying hard to offer universal health insurance coverage. But the important question is why all small businesses aren’t offering health insurance to their employees. Common sense and research say that cost plays an important role in making health insurance decisions for business owners. But, the US is constantly encouraging employers to provide insurance. For this cause, tax credits are being offered.
In March, US passed the ‘Affordable Care Act’ that necessitates all Americans to have health insurance by the year 2014 or else pay a penalty. The government’s role in managing the problem will get highlighted based on companies’ responses to health insurance. Presently, only a few small businesses offer insurance. Two-thirds of US start ups did not offer insurance in first five years of their operation.
Research shows that companies offering insurance differed from the ones that didn’t. These companies scaled the ladder and were larger and higher-paying designated as corporations or partnerships. Only few companies can grow dramatically as it is found that the majority are sole proprietorships having modestly paid employees. So, it becomes evident that very few are health insurance providing types while most companies do not fit into the profile.
The fact remains that offering health insurance isn’t something that young companies tend to do as they evolve in their business. So, government programs and state exchanges need to cover all such young companies that do not provide insurance to workers. Moreover, small companies function as low-paying sole proprietorships and hire part-time workers. Such companies actually do not see any financial improvements in their business on providing health insurance policies.
Hundreds of thousands of businesses that flourish in the U.S. every year are not large enough to provide employee health insurance. So, millions of workers hired by these small companies shall have to be covered with insurance from government programs and state exchanges for the coming years.
This article was submitted by Rohit Arora, co-founder of Biz2Credit. Biz2Credit is a small business marketplace that connects entrepreneurs with financing options and advice to grow their business. Send all questions to