Healthcare Coverage an Important Asset to Small Businesses; Two-Thirds Support Employees by Providing Health Insurance

One-third do not provide this key benefit; paying for healthcare coverage a top issue for small business owners in 2005

BUFFALO GROVE, IL (February 23, 2005) - Two-thirds of small businesses provide health insurance benefits for their employees according to a new study from the IPA Small Business Research Board (IPA SBRB). One-third of the small businesses surveyed do not provide this important benefit.

"Health insurance is a benefit employees expect to receive. Due to dramatically escalating costs, small business owners either cannot offer health insurance or need to cut back on this benefit, hampering their ability to attract and retain employees," said Gregg Steinberg, President of IPA, the largest privately-held provider of management consulting services to small and medium sized businesses in North America, and a member of the U.S. Chamber of Commerce Council on Small Business.

"The Small Business Health Fairness Act of 2005, which has been introduced in both the U.S. Senate and House of Representatives, would go a long way to making this important benefit more affordable to small business owners and their employees, as well as to assist millions of uninsured who are employed by small businesses in obtaining coverage," Steinberg continued.

Beyond general economic factors, healthcare costs were cited by small businesses as the single most important issue that owners felt would affect them this year - 18% saying this would have the greatest impact on their businesses in 2005. This is consistent with a September 2004 IPA SBRB study when economic factors and healthcare costs were named by small business owners as the top two issues impacting their businesses.

Following are the responses from small business owners and managers about the issues that would have the greatest impact on their businesses in 2005:

Among small businesses offering health insurance, 34% pay the entire premium, 36% pay more than half of the premium and 29% pay up to half of the premium.

Employer health care costs have increased an average of 15% each year over the last five years according to surveys by The Kaiser Family Institute and The National Association of Health Underwriters. Despite concern about these escalating healthcare costs, 88% of those in the IPA SBRB poll said they would maintain or increase the amount they are contributing to their employees’ healthcare insurance costs.

The IPA Small Business Research Board was created to ascertain the opinions of small business owners and managers on a wide variety of topics related to their own business as well as national and international issues that may impact their operations.

Participants in the poll provide feedback on significant issues and allow for real-time insight into the state of small businesses nationwide. The universe of participants is developed from among small businesses across the United States. More than 175 small businesses owners and senior managers participated in this IPA SBRB poll. The IPA SBRB study is a voluntary survey conducted via phone, email and fax. The poll was structured and supervised through an independent resource.