Am I justified in cutting employee health insurance???? (small business, sales, bankrupt)

[jlady]

I would like to take away our paying for health insurance for our 2 employees. I would like some opinions.

Here is our scenerio.

We purchased this well established business 4 years ago, knew nothing, kept 2 existing employees. Previous owner paid for their health insurance, so we did also.

With the economy situation we have suffered as have many businesses have, the last 2 years we been down in sales as well as profits, lets just say we (husband/wife) made under 50k profit last year and looking like less this year.

I have always felt a business as small as ours doesn't typically pay for employee health insurance and therefore why should we and now am lobbying for it even more.

Employees

Male, 40's, Very valuable to us in terms of work performance. Overweight, walking timebomb, always sick, hasn't been to doctor in 4 years, probably will never go unless literally dying.

Female, 60's, About 30% valuable in work performance (only needed 4-5x a year and doesn't do what we want unless we press her) but keep her because hubby feels sorry for her as she is only working part of couple, lots of money issues (hand to mouth). Has minor long term health issues where she sees a doctor 3-4 times a year.

Hubby feels sorry for them, I am like why should we suffer because of them.....our money keeps going down....but nothing changes for them (but then again they don't have much to start with).

Also if we do cut the health insurance should we give them a token raise, even though we can't afford to???

So am I justified in wanting to cut the insurance???

[bande1102]

When all is said and done you have to do what is best for the business. But I question why you're paying for an employee who isn't worth her pay (the woman). That doesn't make sense to me at all so she'd be my first concern before the insurance issue. If the male worker isn't using his health insurance anyway, would he care? Just curious, how do you know how often your employees go to the doctor and how do you know their health history? Finally, if you're trying to save money by dropping health insurance, why would you spend money by giving them a raise??

On the other side of the coin, health care is a huge deal to me and most of the people I know. I'm healthy, nonsmoker, no long term or chronic health conditions and no way will I work at a place that doesn't offer some kind of health insurance benefits. Raising the issue because if you do drop the insurance and these workers leave, you might have trouble finding someone willing to accept a job without healthcare.

Bottom line: I'd let the older woman go and get a cheaper healthcare plan to save money.

[jlady]

When all is said and done you have to do what is best for the business. But I question why you're paying for an employee who isn't worth her pay (the woman).

Honestly because we feel sorry for her!! They are near homeless and she is probably to old to get another job or at least a comparable job.

If the male worker isn't using his health insurance anyway, would he care?

He would care because he will feel something has been taken away from him and want a raise to make up for it.

Just curious, how do you know how often your employees go to the doctor and how do you know their health history?

In a small business like this you can't help but know personal things about your employees, they talk about it!

Finally, if you're trying to save money by dropping health insurance, why would you spend money by giving them a raise??

Because somewhere in me, I feel it is not right to take away and not give something in return.

On the other side of the coin, health care is a huge deal to me and most of the people I know.

It is to me also, but I pay for mine out of my own pocket. I realize it is important to everyone, am I wrong that it is uncommon for small business to pay for health insurance, I think I want to fit in the average and not be a ground breaker...unless we were making alot of money then I would have no problem with it.

Raising the issue because if you do drop the insurance and these workers leave, you might have trouble finding someone willing to accept a job without healthcare.

The females job we can absorb part of and/or hire lower paid less skilled workers if we had to.

Bottom line: I'd let the older woman go and get a cheaper healthcare plan to save money.

We may have to do that, and I have thought about that, but we are her lifeline and I thought job vs insurance, if she had to lose one she would rather lose the insurance!! But then both of them suffer if that happens. We will have to wait and see how long this drought lasts!

[colleeng47]

I assume from what you've written that your company is paying the full premium for your employees? How about a compromise. Tell them they can keep their health insurance if they wish to, but they have to contribute to the cost. That is VERY COMMON at most companies today. Then the decision to keep the insurance is theirs, and if they want to continue it, you deduct their part of the premium from salary.

[jlady]

That is another option, although neither can afford it, they are literally living hand to mouth, nothing to spare. But at least it would be an option.

[colleeng47]

Originally Posted by jlady

That is another option, although neither can afford it, they are literally living hand to mouth, nothing to spare. But at least it would be an option.

But you can't afford it either, and you own the business.

[laysayfair]

Originally Posted by jlady

I would like to take away our paying for health insurance for our 2 employees. I would like some opinions.

Here is our scenerio.

We purchased this well established business 4 years ago, knew nothing, kept 2 existing employees. Previous owner paid for their health insurance, so we did also.

With the economy situation we have suffered as have many businesses have, the last 2 years we been down in sales as well as profits, lets just say we (husband/wife) made under 50k profit last year and looking like less this year.

I have always felt a business as small as ours doesn't typically pay for employee health insurance and therefore why should we and now am lobbying for it even more.

Employees

Male, 40's, Very valuable to us in terms of work performance. Overweight, walking timebomb, always sick, hasn't been to doctor in 4 years, probably will never go unless literally dying.

Female, 60's, About 30% valuable in work performance (only needed 4-5x a year and doesn't do what we want unless we press her) but keep her because hubby feels sorry for her as she is only working part of couple, lots of money issues (hand to mouth). Has minor long term health issues where she sees a doctor 3-4 times a year.

Hubby feels sorry for them, I am like why should we suffer because of them.....our money keeps going down....but nothing changes for them (but then again they don't have much to start with).

Also if we do cut the health insurance should we give them a token raise, even though we can't afford to???

So am I justified in wanting to cut the insurance???

If you can find people who will do the job as well or better without the insurance then you owe it to your business to get rid of the insurance. You shouldn't keep someone on because "you feel sorry for them". That's a bad business decision. Don't give raises unless it's supported by the market and their productivity and value to the business. Remember, you're a business, not a charity.

[Mircea]

Originally Posted by jlady

We purchased this well established business 4 years ago, knew nothing

In retrospect that was a mistake I hope you learn from.

Originally Posted by jlady

Male, 40's, Very valuable to us in terms of work performance. Overweight, walking timebomb, always sick, hasn't been to doctor in 4 years, probably will never go unless literally dying.

Female, 60's, About 30% valuable in work performance (only needed 4-5x a year and doesn't do what we want unless we press her) but keep her because hubby feels sorry for her as she is only working part of couple, lots of money issues (hand to mouth). Has minor long term health issues where she sees a doctor 3-4 times a year.

Why are you employing them? Cut their hours to drive them out and bring in new people. Use a temporary agency or staffing agency if you have to do that.

Originally Posted by jlady

Hubby feels sorry for them, I am like why should we suffer because of them.....our money keeps going down....but nothing changes for them (but then again they don't have much to start with).

He needs to find a job. You can't make business decisions based on emotions. If he can't handle it, he needs to be an adult, admit it, and move back to the work force, before you end up in bankruptcy.

Originally Posted by jlady

Also if we do cut the health insurance should we give them a token raise, even though we can't afford to???

You are under no moral, ethical or legal obligation to provide insurance. Clearly in the case of the fat-body it's a waste of money, and there's no way you can justify paying insurance for bag-lady who only works a few times a year.

Tell them because of changing circumstances, they no longer have "health insurance" and make sure they get the appropriate COBRA notices.

Under no circumstances should you give them a raise. There's probably dozens of energetic 25 and unders who could perform their jobs for a lot less money and no benefits.


So am I justified in wanting to cut the insurance???[/quote]

[sterlinggirl]

A compromise to consider:

Switch to a high deductible health health insurance plan linked with a Health Savings Account. Then use part of the savings to give them a lump sum at the start of the year or each pay period. You can save a big chunk of money, and they don't go completely without insurance.

The money that you either give them, or that they contribute goes into a savings account that can be used in the same way as a flex account, but it doesn't expire at the end of the year. It can be used for dental costs, vision, aspirin, prescriptions, etc.

[sheenie2000]

I think you need to look at things as a business decision and look at the numbers.

Why are you paying health insurance for a lady who only works 4 times a year? She'll survive even after you let her go. If she's older, I'm sure she can get medicare or something? Some states give free healthcare also. Maybe you can look up information on that if you feel bad for her and tell her how to go about getting it.