First Person: Why I Didn't Provide Insurance for My Employees

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Long before the threat of Obamacare to small businesses, an employee I had terminated threatened to sue me because I hadn't offered her health insurance. I laughed at the time but I think back to those days occasionally. For the record, I had hired the young woman on a trial basis and it didn't work out due to her performance. I was shocked at the idea that someone believed an employer was required to provide health insurance.

Things have changed in the last 13 years. While still not required by law, there are very few large businesses that don't offer health insurance. I had the option of joining a health-care plan while working part-time at Waffle House. It's the small businesses that currently struggle to provide a competitive insurance plan for their employees.

There are several reasons I did not offer health insurance to my staff.

Size of staff

The largest number of full-time employees I had at any one time was six. In the late nineties, a health-care plan for a group of seven was hard to find. The big insurance companies wouldn't even give me a quote. My regular independent agent for other insurance did get a quote from a smaller company. The monthly premium for my own family of three was quoted at more than $600 per month with individual deductibles of $5,000.

Lack of Group Participation

I had a unique situation in that the majority of my employees had access to other medical insurance at much better rates than I could provide. I employed a couple in which the husband was retired with an insurance package. Another man who worked full-time had a wife who worked for a major airline with benefits. The majority of my staff didn't need me to provide insurance. For those who could choose to participate, even if I could have paid 50 percent of their premium as an employer, their share would be more than their budget allowed.

Uncertainty

I was involved in the real estate field and, while things were going well in the late nineties, I also knew it couldn't last forever. While I didn't have a crystal ball to look forward to the collapse of the mortgage industry, I knew that business would rise and fall. While I put a percentage of business earnings into savings, I never wanted to be in a position of struggling to pay a high insurance premium on top of the required overhead that made it possible to actually conduct business.

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