Small Business and the Health Care Dilemma

Small business owners see no light at the end of the tunnel for health care.  Health care is the second highest expense for most small businesses, after employee wages.  The health care dilemma is causing many small business people to pull out their hair. Although employee health care probably won’t be mandated for the smallest of businesses (those with under 25 employees), not having health care will mean not being competitive for jobs with larger employers.  Many of us small business owners need the coverage ourselves, and high health premiums can put us out of business. We have few options, none of which is attractive.

What are the small business health care options?

• If you don’t have employees, you can rely on a spouse or domestic partner’s health insurance, and hope it doesn’t get cut.  If your spouse’s health care is eliminated, you will have to pay the monthly premiums, which could cost you more than you can afford.

• You can hire only contract workers, so you don’t have employees to worry about.  But you don’t have as much control over these workers, and you don’t have loyal, full-time people to count on.

• You can find a health care policy with a high deductible (including a Health Savings Account), which means you are only providing catastrophic care.  This option is more affordable than paying for full coverage.

• You can require employees to pay part of the cost, or you can pay for employee coverage and not families, or some variation on this option.  But you are back to the problem of competition, because larger companies are offering better coverage, and many people are looking for jobs just for the health coverage these days.

• You can hope that the new government health plan will include something for small businesses, but, as the National Federation of Independent Business says, it will probably be a “healthcare system run with the efficiency of the Post Office and the compassion of the IRS, at Pentagon prices.”

For now, I’m watching from the sidelines. I’m hoping that, when the dust clears on the Obama health care plan, there will be reasonable options for small businesses, like co-operatives, which could reduce costs by spreading them over a larger group.  I hate to say things will get better, but they can’t get much worse, can they?

Image: sxc.hu