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Health Insurance Costs Still Number-One Problem for Small Businesses

Source: Business Journals

Posted on 23 Aug 2012 by Neilson

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Health care costsThe cost of health insurance remains the biggest problem facing small business owners, according to a National Federation of Independent Business survey of its members.

Every four years, NFIB asks its members to rate 75 different potential business problems. The cost of health insurance has rated No. 1 on every survey. This year, more than 52 percent of small business owners said health insurance costs was a critical problem.

NFIB contends health care reform failed to make insurance more affordable and expects health costs to remain small businesses’ No. 1 problem four years from now unless “there is a a major refocus of current thinking.”

What is new this year is the emergence of uncertainty -- both about the economy and about government actions -- as a major concern for small businesses. Uncertainty over economic conditions ranked No. 2 on the list of small business problems and uncertainty over government actions ranked No. 4.

“The high level of uncertainty cited by small employers helps to explain the sector’s inability to recover and expand,” said Holly Wade, senior policy analyst for NFIB and the survey’s author.

The price of gasoline and other fuels remains a top concern, just as it was in 2008. Energy costs, other than electricity, ranked No. 3 on the list of small business problems.

Unreasonable government regulations rounded out the top five list.

What about taxes? They account for the rest of the top 10, making taxes the most severe problem cluster this year, compared with costs in 2008. The top tax problems are: federal taxes on business income, tax complexity, frequent changes in federal tax laws and rules, property taxes and state taxes on business income.

The survey also found that business owners have become more concerned about environmental regulations and access to credit during the last four years, but less concerned about interest rates and finding and keeping skilled employees.

The areas of least concern for small business owners were exporting, undocumented workers and access to high-speed Internet.