Sam's Club polls microbusinesses on providing health insurance
BENTONVILLE, Ark. — If you’re running a company of five or fewer workers, chances are you’re relying on funds for healthcare insurance from a source outside of that company. If you’re an employee of a microbusiness, you’re likely not relying on your boss to cover your healthcare benefits, according to the Sam’s Club/Gallup Microbusiness Tracker.
Sam's Club and Gallup discovered that microbusiness owners, many of whom are moonlighting to pursue their small business dream, are getting creative in financing their own healthcare coverage. Only 1-in-10 (9%) of the microbusiness owners funded their own healthcare insurance from within the microbusiness itself. More than 50% rely on their primary job or pay for it out of their own wallet, showing a diverse pool of sources for medical benefits:
32% from a current or former employer that is not the microbusiness;
23% from insurance paid for on their own but not through the microbusiness;
19% from Medicare;
9% from insurance paid for through the microbusiness;
4% from military or veteran benefits;
1% from a union; and
1% from Medicaid.
According to the Sam’s Club/Gallup Microbusiness Tracker, microbusiness owners with employees say they largely do not offer healthcare benefits to their employees now (76%), did not provide these benefits in the past (63%) and do not plan to offer these benefits in the next 12 months (70%). For those employers that do provide the benefits, looking at the business outlook ahead most (78%) plan to maintain them at a current level, with some (10%) increasing the benefits and some (7%) lowering them.
"The microbusiness owners we track in this study have demonstrated a steely resolve to know their customers and deliver quality products or services to market. Their sometimes razor-thin margin business models do not always leave room to cover health care,” said Rosalind Brewer, president and CEO of Sam’s Club. “Yet, health benefits are a key differentiator for many microbusinesses and a recruiting tool for top talent so it’s an issue the small business community is watching closely.”
The survey found that 1-in-3 (38%) microbusiness owners with employees see providing adequate benefits to their employees as a major issue. This number increases for newer microbusinesses.
In terms of financing, the Sam’s Club/Gallup Microbusiness Tracker finds that owners continue to fund their business from a range of sources, with personal savings (66.6%) and credit cards (40.6%) remaining the most commonly utilized sources.
More veterans have used bank loans (37% compared with 28.7%) or retirement savings (38.2% compared to 27.7%) to fund their business compared to owners who haven’t previously served. Examining gender, male owners are more likely to use bank loans (34.1%) compared to their female counterparts (22.6%).
Microbusiness owners remain concerned about future cost increases, mainly taxes (67.2%) but also for employee health benefits (40.9%), utilities (37.9%) and other business costs, such as transportation (32.5%).
The Sam’s Club/Gallup Microbusiness Tracker results reflect 1,006 phone interviews conducted Sept. 2-16, 2014 with companies of five or fewer workers.