Small-business owners have been hit hard in the past year — however, progress is already being made toward recovery. According to NFIB’s monthly jobs report, 56% of small-business owners reported hiring or trying to hire in February with additional plans to fill open positions or create new jobs in the next three months.1 Americans are also starting new businesses at the fastest rate in more than a decade, with new business applications increasing 42% February 2021 versus a year ago.2

While these statistics are promising, one point to not overlook is the continued or even heightened importance that health insurance will have on small-business employees. A recent survey found that 78% of employees say employer-provided health care coverage impacts their decision to stay at their current job.3 However, costs often limit the amount and type of health insurance employers can afford to offer. By rethinking their overall benefits package, businesses can help create a culture that demonstrates consideration for employees without sacrificing the bottom line.

Feeling the pinch

Rising health care costs are hitting both employees and employers hard. In fact, 58% of workers at small businesses couldn’t pay $1,000 or more for out-of-pocket expenses without relying on credit and going into debt if an unexpected serious illness or accident occurred today, according to Aflac’s WorkForces Report. In addition, more than half (52%) of small businesses that offer benefits say rising health insurance costs are preventing their company from increasing wages.4

While many small businesses have been hit hard, finding ways to enhance benefits packages can add value to overall compensation packages and, in turn, help attract and retain talent.

Addressing the pain points

These three cost-efficient benefits offerings can help employers invest in employees’ well-being and help them mitigate medical costs.

  1. Dental and vision insurance. After health insurance, dental and vision insurance consistently rank among the most important benefits to employees.4 These plans help with preventive care costs for routine checkups and exams, which can lead to the detection of numerous conditions before they require more expensive treatments.Some smaller employers may typically view these coverages as too expensive or typically not available with a low headcount. However, insurers like Aflac make these coverages available to companies with as few as three employees, offering a streamlined underwriting process and upfront rates.
  2. Supplemental insurance. The pandemic has shined a light on the role supplemental coverage can play in helping provide financial protection in the event of an injury or illness. Supplemental coverage like critical illness, hospital indemnity and accident insurance helps with the expenses health insurance doesn’t cover. These policies pay cash benefits directly to policyholders, unless otherwise assigned, and can be offered on an employee- or partially paid basis, meaning it doesn’t have to be a large line item on employers’ budgets.

One offering that is popular this year is life insurance. In fact, according to LIMRA, awareness about the need for life insurance protection has increased among millennials by 71% since January 2020, with 48% indicating they will buy life coverage in the next year.5

  1. Value-added services. Some insurers also provide access to value-added services that address unique employee needs. Two popular options are telehealth services, which have surged in popularity during the pandemic, and employee assistance programs, which provide short-term support from work-life specialists to help resolve personal challenges that might affect work performance. Other services include access to a health care advocate who can help find providers in-network and assist with bill negotiations, as well as financial and legal advisors who can help with important tasks like preparing a will.

A benefits consultant can help connect businesses with a carrier helping ease the burdens of benefits administration with a digital solution for benefits enrollment, management and communications. Employees can benefit from a strong carrier partnership, as well, with innovative insurers that offer policyholders enhanced digital capabilities that make filing claims, managing coverage and contacting customer service much simpler.

A rising tide lifts all ships

As small businesses begin to move forward from the financial difficulties imposed by the pandemic, it is the perfect time to reevaluate creative ways to boost benefits offerings and establish a competitive edge. As your business looks to greener pastures ahead, start thinking through how you can help employees get there, too.

Virgil Miller is president of Group and Individual Benefits at Aflac. He is responsible for leading the U.S. teams driving group and individual benefits, including broker distribution and the U.S. independent career sales agent distribution team; Aflac’s newly acquired business of Aflac Dental and Vision and Aflac Group Life, Absence and Disability; consumer markets; service and administration; analytics; quality assurance; business services; and Communicorp, Aflac’s wholly owned marketing and printing solutions subsidiary.

1 William C. Dunkelberg, NFIB Research Foundation. “Majority of Small Business Owners Reported Hiring or Trying to Hire in February.” Accessed April 5, 2021.

2 U.S. Census Bureau. Business Formation Statistics. Accessed April 5, 2021.

3 America’s Health Insurance Plans, “NEW SURVEY: Employer-Provided Health Coverage Is Delivering Real Value for Consumers During the Pandemic.” Accessed April 5, 2021.

4 The 2020-2021 Aflac WorkForces Report is the 10th annual Aflac employee benefits study examining benefits trends and attitudes. Conducted by Kantar on behalf of Aflac, the study captured responses from 2,000 employees and 1,200 employers across the United States in various industries. Learn more at

5LIMRA, “Study Finds COVID-19 Spurs Greater Interest in Life Insurance.” Published April 5, 2021.

Content within this article is for informational purposes and does not constitute legal, tax or accounting advice regarding any specific situation. Aflac cannot anticipate all the facts that a particular employer will have to consider in their benefits decision-making process.

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