Most Microbusiness Owners Have Health Care Coverage but Benefits Have Not Yet Reached Employees, Sam’s Club Survey Reveals

If you’re running a company of five or fewer workers, chances are you’re relying on funds for health care insurance from a source outside of that company. If you’re an employee of a microbusiness, you’re likely not relying on your boss to cover your health care benefits, according to the Sam’s Club/Gallup Microbusiness Tracker.

Sam's Club and Gallup discovered that microbusiness owners, many of whom are moonlighting to pursue their small business dream, are getting creative in financing their own health care coverage. Only one in ten (9%) of the microbusiness owners funded their own health care insurance from within the microbusiness itself. More than 50 percent rely on their primary job or pay for it out of their own wallet, showing a diverse pool of sources for medical benefits:

• 32% from a current or former employer that is not the microbusiness
• 23% from insurance paid for on their own but not through the microbusiness
• 19% from Medicare
• 9% from insurance paid for through the microbusiness
• 4% from military or veteran benefits
• 1% from a union
• 1% from Medicaid
• 1% other or undisclosed

According to the Sam’s Club/Gallup Microbusiness Tracker, microbusiness owners with employees say they largely do not offer health care benefits to their employees now (76%), did not provide these benefits in the past (63%) and do not plan to offer these benefits in the next 12 months (70%). For those employers that do provide the benefits, looking at the business outlook ahead most (78%) plan to maintain them at a current level, with some (10%) increasing the benefits and some (7%) lowering them.

"The microbusiness owners we track in this study have demonstrated a steely resolve to know their customers and deliver quality products or services to market. Their sometimes razor-thin margin business models do not always leave room to cover health care,” explained Rosalind Brewer, president and CEO of Sam’s Club. “Yet, health benefits are a key differentiator for many microbusinesses and a recruiting tool for top talent so it’s an issue the small business community is watching closely.”