As U.S. small business owners review their year-end business performance and set objectives for 2013, decision-makers should include an evaluation of how well existing benefits programs address top fiscal concerns. In fact, controlling health care costs is the most important human resources issue for small businesses, according to the 2012 Aflac WorkForces Report (AWR), an online survey of nearly 1,900 benefits decision-makers and more than 6,100 U.S. workers conducted by Research Now and released by Aflac, the No. 1 provider of supplemental and guaranteed-renewable insurance in the United States.(1)

"Small businesses are at the heart of the American dream and the engine of U.S. economic growth. Yet the 2012 Aflac WorkForces Report reveals that 55 percent of small businesses find it challenging to provide robust benefits while staying within tight budget constraints," said Paul S. Amos II, president and chief operating officer for Aflac U.S. "We know that small business owners juggle many responsibilities, including taking care of their employees – often with little or no human resources expertise. The challenge comes down to company resources, including what's available to business owners to provide benefits and communicate with employees about their options and, how they can best use benefits to improve their health and well-being."

Managing Rising Health Care Costs

Similar to the Aflac study results, an annual small business owner survey by the National Federation of Independent Business revealed that the cost of health insurance remains small businesses' number one problem, topping the list for 52 percent of business owners.(2) As a result, business owners and benefits decision-makers need creative solutions that can provide short- and long-term cost advantages.

"Many small business owners and their employees are looking for flexible benefits solutions to address rising health care expenses," said Amos. "Small businesses that take a close look at their benefits offerings can gain a competitive edge by providing employees robust benefits options including voluntary insurance without incurring additional cost to the company."

Voluntary insurance and wellness programs are two solutions that can enhance traditional benefits and help protect employees' health and financial well-being, while positively impacting a company's bottom line.

Win-Win Solutions

Voluntary insurance expands benefits offerings by providing a wide range of coverage choices, including short-term disability, life, dental and vision without adding benefits costs to employers. Other relevant insurance for small businesses include voluntary critical illness, hospital indemnity and accident plans that can provide much-needed cash benefits to policyholders faced with high out-of-pocket expenses associated with an unexpected injury or illness. Voluntary insurance benefits also can have a big impact on a business's finances, with 30 percent of small businesses seeing fewer workers' compensation claims after introducing voluntary insurance plans.(1)

Wellness programs are currently offered by more than one-third (36 percent) of small businesses as an effective cost-cutting solution.(1) Among all businesses with a wellness program, the Aflac study revealed that 44 percent agree they are able to offer lower premiums as a result of their wellness program. In addition, a review of the return on investment for wellness programs shows on average a 28 percent reduction in sick days, a 26 percent reduction in health costs, and a 30 percent reduction in workers' compensation and disability management claims.(3)

Voluntary Insurance Provides Meaningful Benefit Accent

Like other small businesses, Accent Computer Solutions, an information technology support firm in San Bernardino County, California, seeks creative benefits solutions that don't have a negative impact on operating expenses. In Accent's case, executives realized they needed to make changes to adjust their expenses and that the company couldn't continue to provide employees the same level of benefits. However, Accent's executives were determined to find smart solutions that fit their budget so they could give employees flexible insurance options.

"We couldn't afford everything we wanted to offer employees and still run a profitable business," said Derek Woolf, Accent's vice president and general manager. "When Aflac contacted us about their voluntary insurance policies, we quickly discovered the solution was right in front of us — our employees could get extra protection without adding benefits costs to our company."

While Accent has a stable base of 30 employees with little turnover, Woolf acknowledges that the voluntary insurance policies they offer are important to employee retention and a good complement to the company's additional benefits during a candidate's recruitment process. He said, "We now have a solid benefits package that makes us competitive with, if not ahead of, other companies a candidate may be considering."