Health Care Costs Top Concern for Business Owners

October 24, 2012 (PLANSPONSOR.com) – Health care and the economy are at the top of business owners’ minds, with more than half saying health care costs impact decisionmaking.

According to The Principal Financial Well-Being Index, one-fourth of business owners (24%) rate managing the cost and administrative responsibilities of health care as their top concern for the well-being of their business, and another 24% say understanding how health care reform impacts their business is their top concern.

Of the benefits offered by business owners, 92% say the most important to employees is health insurance, followed by a defined benefit plan (86%).

Many businesses are turning to wellness programs to improve employee health and reduce risks. Nearly two-thirds of those surveyed (64%) offer some form of wellness benefit to their employees, including educational tools or resources (28%), online wellness information (25%), printed wellness information (28%), fitness center discounts (25%) and smoking cessation programs (23%).

To encourage employees to participate in the programs, more than half (54%) of employers participate as an example, and 40% allow flexible work schedules to create time for participation during the work day. More than one-quarter (27%) lower health insurance costs for those who participate.

Business owners reported wellness programs have made employees more productive at work (47%); increased employee retention (42%); allowed employees to spend less time away from work (37%); yielded better employee engagement (36%); and lowered health insurance costs (32%).

Almost seven in 10 business owners (69%) agree that an effective wellness program helps employees better prepare for retirement. Regarding retirement savings, one-quarter of business owners think their employees should be saving 6% to 10% of their pay for adequate retirement income. A little more than half (52%) believe employees have what they need to protect their health and income. Only 31% believe their employees are saving enough for a comfortable retirement.

The Principal Financial Well-Being Index: Business Owners survey was conducted online in the U.S. by Harris Interactive on behalf of the Principal Financial Group between August 7 and August 27 among 604 business owners in companies of 10 to 500 employees. This is one in a series of annual studies to identify and track changes in the perceptions of business owners of small and midsized businesses. The full report is here.

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