Why small businesses struggle to offer competitive health insurance

  • Small businesses struggle to stay competitive when it comes to hiring the best talent.
  • Labor costs are a major obstacle to the growth of small businesses.
  • Cigna + Oscar offers solutions adapted to small businesses.

The Great Resignation of 2021 is still ongoing. Competition for talent is intensifying. Labor shortages remain a critical challenge for small businesses across the country.

According to the October monthly employment report from the National Federation of Independent Businesses, 49% of small business owners reported vacancies they couldn’t fill.1

This is true for companies like 9Round Fitness, a kickboxing studio in California. Ashley Richardson, who owns two franchises, has struggled to hire new employees for months. Recently, she lost her best employee to a company that offered better benefits.

Conversations with small business owners and the results of a survey conducted by Cigna + Oscar provided insight into the current business climate. Here’s how businesses can overcome their challenges to stay competitive in healthcare delivery.

Small businesses struggle to deliver benefits

Richardson said she tries to stay competitive by offering her employees free gym memberships and a 401 (k). She also recently increased her starting salary.

She said her small business couldn’t afford health care.

It was echoed by many respondents to Cigna + Oscar’s proprietary survey, conducted in July with Insider Studios and Dynata, a first-party data and information platform provider. The survey revealed what small business owners / policy makers and employees think about healthcare.

The majority (59%) of small business owners and benefit decision makers said they could not compete with large employers when it comes to employee benefits.2 And 60% said they limited the insurance plan options available to employees because of cost.2 More than two-thirds said they felt health coverage had not been designed with them in mind.2

Cigna Oscar Small businesses want to deliver strong healthcare, but it can get expensive

Insider Studios

Amanda Ma, CEO of Innovate Marketing Group, based in California, has 10 full-time employees. She offers healthcare because it is an industry standard and helps her business stay competitive. But she wants her provider to offer better rates, better coverage and lower co-payments, and to be more user-friendly.

“Wait times are generally long,” she said. When she contacted her supplier to resolve an issue with an employee in the system, “it took two weeks to resolve the issue.”

Logan Allec, CPA and Owner of Personal Finance Site Money well done, has had similar issues with his broker and has to spend a lot of time explaining the benefits to his employees himself.

“I’m pretty confident that if I were a bigger company I would get better service,” he said.

Sixty-four percent of employees surveyed expressed satisfaction with their current health plan, while only 57% of owners and decision-makers were happy with their options.2 The gap in satisfaction with their company’s current healthcare plan suggests that owners know there are better options that they just can’t afford to offer.

In fact, 45% said they couldn’t raise wages because of Medicare costs.2 At the same time, many small businesses like Richardson’s have had to increase their wages to stay competitive during the labor shortage.1

Cost variables make healthcare difficult to navigate for small businesses that face challenges on all fronts.

“The healthcare system, to become acceptable to small businesses, has to be something that we can budget for, something that has control around it, so it’s not overwhelming,” said Richardson.

How Small Businesses Can Offer Health Insurance

Many small business owners know the importance of providing health insurance. It can help attract talent, retain employees, and build trust between employees and employers. Additionally, small businesses that offer health insurance may benefit from tax breaks.

In the survey, 72% of business owners and policy makers said they would switch plans to provide better employee benefits if they were available at a lower cost.2

Cigna + Oscar offers solutions adapted to small businesses. Their variety of plans include access to Cigna’s two provider networks, low-cost prescriptions that members can top up directly from their phones, and virtual appointments for emergency care (and even primary care). virtual in some markets). Oscar’s member-driven digital experience makes it easy to administer and manage employee benefits.

Allec wants his insurance to be more understandable and to have more support from his broker so that everything does not fall on him.

“It would be great if employees could look at some kind of interface, website or app that explains their coverage in easy to understand terms,” he said. “I have a million things to do in my business, and I don’t need a million and one explaining coverage options to my employees.”

Oscar members benefit from a dedicated care team to help them resolve any issues, get their questions answered, and get the most out of their plans 24/7.

In a difficult business climate, it is essential for small businesses to have a health insurance provider who can help attract and retain talent.

Learn more about how Cigna + Oscar can help your small business here.

This post was created by Insider Studios with Cigna + Oscar.

Cigna + Oscar coverage is provided by Cigna Health and Life Insurance Company. CA: benefits administered by Oscar’s health administrators. Other states: services administered by Oscar Management Corporation. Pharmaceutical Benefits Provided by Express Scripts, Inc. Cigna + Oscar Health Insurance contains exclusions and limitations. For more details on product availability and coverage, please consult your plan documents or contact a representative.


1NFIB. “Small business optimism wanes, owners unsure of future business conditions. “October 2021.

2Cigna + Oscar, Insider Studios and Dynata. “Small Business Attitudes Toward Health Care and Benefits”. July 2021.

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