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Health insurance too costly --
or is it? Survey
finds many owners don't know of tax breaks
Bankrate.com
 Ask
a small-business owner why the company doesn't offer health insurance
to employees, and the owner will likely answer, "Too costly."
But is it really? A new survey of small-business
owners shows why they don't offer health insurance, but also reveals
that many don't know of the tax breaks that could make coverage
more affordable.
The 2000 Small Employer Health Benefits Survey
was conducted by Mathew Greenwald & Associates Inc. The Blue
Cross and Blue Shield Association, the Employee Benefit Research
Institute and the Consumer Health Education Council co-sponsored
the survey.
While the survey identifies small businesses
as the key to reducing the ranks of Americans without health insurance,
in 1999, 40 percent of firms with between three and 49 employees
did not offer coverage, while almost all employers with 200 or more
workers did.
The top major reason for not offering insurance
-- cost -- was cited by more than half the businesses surveyed.
But most small employers were unaware of health
insurance tax incentives. For example, 57 percent did not know that
health insurance premiums are 100 percent tax deductible, and 65
percent did not realize that premiums are treated like general business
revenue for tax purposes.
In addition, nearly half of small-business owners
were unaware that employees who purchase their own insurance cannot
deduct the whole cost, and 37 percent did not know that employees
do not pay tax on the share of health insurance costs paid by their
employer.
Other major reasons for not offering coverage
include: employees having coverage elsewhere (43 percent); revenue
too uncertain to commit to a plan; (40 percent); owner has coverage
elsewhere (40 percent); employees can't afford it (37 percent);
most workers being seasonal, part-time or high turnover (34 percent);
and employees prefer wages and/or other benefits (30 percent).
Where does your business stack up on health
benefits?
--Posted: Oct. 25, 2000
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