Employee benefits

After pay, health insurance is the most important inducement small businesses use to recruit and keep employees motivated. Yet many employers are finding the ability to provide cost effective health insurance more challenging as premiums continue to rise and the options available continue to decrease. Employers are beginning to think “out of the box” and are looking at new ways to offer their employees benefit programs, and to keep them motivated.

NAPEO, the National Association of Professional Employer Organizations, conducted an employee benefits survey in November of its members’ clients to understand the concerns of small and medium-sized employers. NAPEO is an organization that represents firms, PEOs, which specialize in providing human resources support and employee benefit packages to small and mid-sized employers nationwide. Mirroring the sentiment across the country, the trade association found that health care costs were their second-biggest worry after attracting workers.

The survey also revealed that more than half of the 365 small businesses surveyed said their premiums rose as much as 10 percent this year, and almost one in 10 told NAPEO they would dump their health coverage next year or are unsure about it. Many of these companies said they will pass at least some costs along to employees next year. One in five said they would raise co-payments for office visits or deductibles; one in four said they’d raise premiums.