The majority of small businesses do not offer insurance benefits to their employees, often believing they cannot afford them, a LIMRA study has found.
“With the cost of benefits — in particular health care — rising steadily over the past two decades, it is not surprising that many small-business owners have made the decision not to offer employee benefits,” said Kimberly Landry, research analyst, LIMRA Insurance Research.
“What our study found was that few small businesses considered making voluntary benefits available to their employees, which provide employees the ability to obtain the coverage they need at little to no cost to the business.”
The study found that 53 percent of these business don't offer benefits and that two-thirds of them have not been approached by a broker or agent within the last 12 months. However, more than four in 10 of these businesses have considered offering benefits and nearly half agreed to meet with a producer once they were contacted.
The study also found that, among small businesses that do not currently offer benefits, six in 10 are unfamiliar with voluntary products.
According to Census figures cited by LIMRA, 98 percent of employers in the U.S. have fewer than 100 employees, accounting for approximately 35 percent of the U.S. workforce and representing about 40 million workers.