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WINDSOR, Conn., June 12, 2013 — A new LIMRA study finds that the majority (53 percent) of small businesses (2-99 employees) do not offer insurance benefits to their employees, often believing they cannot afford them (chart).

Why-No-Benefits-Small-BusinessAccording to the U.S. Census Bureau, 98 percent of employers in the U.S. have fewer than 100 employees, accounting for approximately 35 percent of the U.S. workforce and representing about 40 million workers.

“With the cost of benefits — in particular health care — rising steadily over the past two decades, it is not surprising that many small business owners have made the decision not to offer employee benefits,” said Kimberly Landry, research analyst, LIMRA Insurance Research. “What our study found was that few small businesses considered making voluntary benefits available to their employees, which provide employees the ability to obtain the coverage they need at little to no cost to the business.”

Prior LIMRA research indicates that — depending on the benefit — most employees prefer to purchase their benefits through the workplace. Those who favor purchasing benefits at work cite convenience, the ability to pay through payroll deduction, and less perceived need for background research as top reasons for this preference.

This year’s study found that two-thirds of small employers who do not currently offer benefits have not been approached within the last 12 months. However, more than 4 in 10 of these businesses have considered offering benefits and nearly half agreed to meet with a producer once they were contacted.

“While small employers are less motivated to offer benefits to attract and retain employees in the current economic environment, they are still interested in finding affordable ways to offer these products,” noted Landry.

The study found that, among small businesses that do not currently offer benefits, 6 in 10 are unfamiliar with voluntary products, providing an opportunity for carriers and producers to educate small employers on the advantages of offering voluntary benefits to their employees.

“We have seen many new financial services companies enter the voluntary market in recent years, including some of the largest U.S. carriers,” observed Landry. “These companies are recognizing that businesses, faced with rising medical costs, may be interested in offering a broader array of voluntary benefits to their workers.”


LIMRA Contact:

Catherine Theroux, 860-285-7787,
Mark Morris, 860-285-7875,

About LIMRA:

LIMRA, a worldwide research, consulting and professional development organization, is the trusted source of industry knowledge, helping more than 850 insurance and financial services companies in 73 countries increase their marketing and distribution effectiveness. Visit LIMRA at

Media Contacts

Catherine Theroux

Director, Public Relations

Work Phone: (860) 285-7787

Mobile Phone: (703) 447-3257

Brooke Lacey

Senior Public Relations Specialist

Work Phone: (860) 298-3920

Mobile Phone: (413) 530-6184

Bailey Reed

Public Relations/Social Media Specialist

Work Phone: (770) 984-3788

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