With healthcare costs on the rise, "microbusinesses" are struggling to cover health insurance costs. According to the Sam's Club/Gallup Microbusiness Tracker, while most microbusiness owners have health insurance, less than a third (31 percent) provide it for themselves through their own business or out-of-pocket. Here is an overview of the Sam's Club/ Gallup Microbusiness Tracker results.
Background Microbusiness Tracker
While small businesses are generally categorized as firms with fewer than 500 employees, "microbusinesses" employ 5 or fewer employees (including the owner). The Microbusiness tracking poll is a representative survey of microbusiness owners throughout the U.S.
Gallup conducts interviews with microbusiness owners via telephone. A typical Microbusiness Tracker is conducted among a random sample of approximately 1,000 microbusiness owners.
Health Insurance Costs Too High for Microbusiness Owners
According to the tracking poll, 19 percent of microbusiness owners depend on Medicare for health insurance. In addition, microbusiness owners are having difficulty providing health insurance to their employees.
According to Gallup, since microbusinesses have five or fewer workers, they "are too small to ake advantage of significant economies of sale when negotiating insurance premiums and so generally pay much more per employee for their insurance packages than larger employers do. As such:
- Only one in five (21 percent) of microbusiness owners provide health insurance for their employees
- Forty one percent of microbusiness owners are concerned about a significant increase in the cost of providing health benefits in the next 12 months
Not Offering Healthcare Is a Significant Barrier In Recruiting
Microbusinesses are not subject to the employer shared responsibility provision of the Affordable Care Act (ACA) and do not legally have to provide their employees with health insurance; however, attracting and recruiting desirable job candidates can be more difficult without healthcare benefits as a part of employee compensation packages.
Microbusiness owners who do not provide healthcare benefits for their employees are more likely to report that finding a qualified candidate is a major barrier facing their business.