A number of reports in recent months have shown that small businesses are now expanding their hiring efforts at phenomenal rates, but some experts have noted that the ways in which these companies are going about the process may indicate a significant shift in the ways expansion efforts – which may necessitate new small business insurance policies – are taking place.
For instance, in May alone, small businesses added some 35,000 new jobs, marking the largest increase for a single month in nearly a year and a half, according to a report from marketing expert Betsy Kruger's entrepreneurial group Strategic Power. However, despite the hiring surge overall, the number of hours being worked by employees at these companies has been slowly declining since the middle of 2011, and at this point, nearly two out of every three small business workers are considered part-timers.
This is likely the result of mandates from the federal government related to the Affordable Care Act, which state that companies employing more than 50 full-time workers (defined as those working 30 or more hours per week) must provide those people with health insurance options so that they can be fully covered, the report said. Consequently, this seems to have led small business owners to dramatically reconsider the ways in which they keep people on board, which is more or less in line with what many experts predicted would happen as the nation drew closer to the start of enrollment for government-run health insurance exchanges.
By reducing the number of hours employees work, small businesses may be able to skirt the requirement that they provide such options altogether, which can be a big benefit to the company's bottom line, but perhaps not quite so beneficial to workers themselves. As such, it may be important for owners to weigh their options carefully; some experts have pointed out that it may be more affordable and efficient to keep workers on and at least provide them with some sort of minimal coverage.
Of course, some owners are also simply opting to keep paying their current workers full-time and simply accepting the annual fine imposed by the federal government for not providing health insurance options to those people, the report said. However, this might not be the wisest course of action going forward, because the fine is considerable at $2,000 per uncovered full-time employee, and in many cases, enrolling in the small business insurance exchanges may be more affordable. This may be particularly true as companies expand and have to pay larger amounts in fines as they bring on more workers at 30 hours a week or more.
Strategies going forward
Meanwhile, many small business owners face a different challenge at this point, because the federal government recently announced that it would delay the point at which small businesses will be able to enroll in their own exchanges, as there were a number of implementation problems, the report said. As a consequence, many will have to wait a full calendar year to enroll, unless they choose to get involved in private exchanges instead. Again, there are a large number of moving parts that owners will have to consider, which may make such a decision far more difficult.
Many independent company owners may be changing their hiring plans dramatically, but that can also lead to their having to look for new small business insurance policies. Finding the most affordable workers' compensation or general liability insurance options can be helpful to many companies' bottom lines, and give them more flexibility in offering health insurance to workers in the future.
