Small Business Health Insurance Problem

Part of the new law is a set of tax credits and penalties to encourage employers to provide insurance.The problem is that for most small young companies, not work.That 's of the My conclusion, based on a I conducted research with Alicia Robb Foundation.We Ewing Marion Kauffman reviewed the decisions of the founders of young companies or not to offer health insurance, using information from the survey on business Kauffman, which follows a cohort of about 5,000 new companies.

The data show that very few new companies offer health insurance for employees. Almost two thirds of businesses with employees have no health insurance of employees at any time during the first five years of operation. Moreover, only one in five insurance offered to their employees every year. Insurance: no performance gains

A pair of young small businesses that offered health insurance differ significantly from those who do not: They usually pay higher, partnerships and corporations, and have offered their employees a number of advantages. Most young companies do not fit this profile. Most are modestly paid employees within individual enterprises. Only a handful of young companies are growing rapidly. A transition from minority entrepreneurs to other legal structures. Few people ever to add a lot of benefits. This means that only a small percentage of young children

One argument often made to justify giving employees health insurance is to help businesses perform better. Those who provide health insurance for employees, according to this argument, the employees do better and work harder. We examined whether the provision of employee health insurance offers all the performance benefits for young companies. We have found that does not work. Control for a variety of other companies and founder characteristics, we saw no significant effect of health insurance for employees available for business survival, growth of assets, sales growth, profit growth, or growth employment during the first five years of operation. In other words, offers health insurance to employees do not seem to do anything to improve the performance of young firms, despite what some observers argue. We should not pretend that the new law will be useful to owners of small businesses by making their companies more successful. low wages, individual firms

The data provide three steals to key decision makers. First, only a minority of new companies that offer health insurance to employees, even for less than five years. Fewer still will not offer insurance to provide. When you think about how to manage the health insurance companies small, the authorities must bear in mind that insurance is not offering something that young companies to evolve naturally as they mature. Consequently, most employees to new companies that do not offer health insurance to be covered by government programs and exchanges of state.