How Soaring Health Costs are Stifling Growth for Michigan’s Small Businesses: Key Insights from Our Latest Survey

Rising health care costs are putting a strain on small businesses in Michigan. A recent survey from the Small Business Association of Michigan (SBAM) revealed that over 75% of respondents feel these costs hinder their ability to hire new workers.

The survey, conducted with around 300 SBAM members from May 15-22, found that 38% experienced health insurance cost increases of 10% to 14% over the past year, while 29% faced hikes of 15% to 20%. As a result, many have cut back on employee benefits. Half of the respondents admitted to reducing or even eliminating benefits due to worries about costs.

Brian Calley, the SBAM president and CEO, stressed the important role that health benefits play in attracting and keeping staff. However, he warned that soaring costs might jeopardize these offerings.

Interestingly, 84% of the surveyed businesses have fewer than 50 employees, spanning various sectors like health care, retail, and manufacturing. Here are some key takeaways from the survey:

• 91% believe health insurance is crucial for employee satisfaction.
• 84% see health care costs as a significant portion of their expenses.
• 83% state that these costs limit their ability to invest elsewhere in their business.
• 67% reported health insurance costs rising more than 10% this year.
• 70% identified health care costs as a barrier to providing employee benefits.

Sue Tellier, president of JetCo Federal, emphasized the need for a collective effort to tackle rising health care prices. “We need actionable strategies to lower costs,” Tellier said, highlighting the urgency for change.

It’s worth noting that 37% of the survey participants are now offering high-deductible health plans, while 22% have increased employee contributions to manage escalating costs. This shift may reflect a broader trend where businesses are forced to adapt their benefits to cope with financial pressures.

Overall, as small businesses navigate these challenges, the focus will likely remain on finding sustainable ways to provide health care while managing expenses.

For more details, you can check the full survey here.

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