Winning Big with Small Business

Tremendous opportunities await brokers who can meet the special needs of smaller employers

by Gil Youmans

Mr. Youmans is the director of small business solutions for Colonial Life & Accident Insurance Company. Connect with him at or visit

Your next big break could come from small businesses. Although it may seem hard to believe, small business — those with fewer than 100 employees — could be your biggest source of income if you know how to approach them correctly and give them what they need. After all, 98 percent of all businesses in the United States have fewer than 100 employees.1

Here are five surefire ways to grab the attention of some of the 5.8 million small businesses out there and make yourself an invaluable partner to them in the process.

Speak health care reform

Much confusion still surrounds the Affordable Care Act and its expected impact on employers and consumers. Like everyone else, smaller employers struggle to make sense of the regulation’s requirements, its deadlines and its implications. Companies with fewer than 50 workers are deciding if they want to offer health coverage or send their employees to the exchanges to purchase medical insurance. Those that already offer coverage must make sure their plans comply with federal mandates. Tax credits, penalties and mandatory deadlines are just some of the issues weighing heavily on their minds.

Helping smaller companies navigate through the confusion of the health care reform legislation could make you an instant hero. At the very least, you can certainly get their attention by discussing the subject. Learn as much as you can about the ACA and how it impacts small business and use the information as a door-opener to reach this important market.

Show them how to save money on employee benefits

Rising health care costs and the cost of insurance benefits rank as the top two concerns of small employers today, according to LIMRA.2 And it’s no wonder. As the cost of health care and providing employee benefits continues to rise, small employers feel the pain more acutely than their larger counterparts.

Because small businesses don’t benefit from the pooled risk bigger companies enjoy, they can’t get the same pricing for their health plans. Currently, the smallest employers pay an average of 18 percent more than large businesses for the same health plan.3 But businesses with fewer than 50 employees stand to gain increased purchasing power now that the federal government’s Small Business Health Options Program (SHOP) offers access to the health insurance marketplace.

One way you can help small employers save money is to help them redesign their health plans. And they may need a nudge from you to do so. Small companies are often among the last to increase their employee contributions toward benefits and to increase deductibles, co-payments or other features of their plans. This may be because they offer so few benefits that they often tend to continue absorbing costs until they can no longer offer the benefit at all.

Introducing small employers to voluntary benefits can be another way to help them save money. According to LIMRA, the reason most small employers don’t offer benefits is because they can’t afford them. In fact, it’s the number one reason they give for not offering insurance benefits. Explaining the advantages of employee-paid voluntary benefits can be a real eye-opener for small employers. Many of them don’t realize they could introduce voluntary products at little or no cost to their company.

Interestingly, 40 percent of small businesses believe they don’t have enough employees to qualify for benefits.2 Offering them voluntary products with low participation requirements can change their misconceptions. Let them know that many voluntary products can be offered to small employers with as few as three workers.

Much confusion still surrounds the Affordable Care Act and its expected impact on employers and consumers. Like everyone else, smaller employers struggle to make sense of the regulation’s requirements, its deadlines and its implications

Give them a better benefits package

Less than half (47 percent) of small firms under 100 employees currently offer insurance benefits to their employees, and those that do tend to offer fewer products than their larger peers.2 The good news for you is that only a third of the firms without benefits have even been approached by an agent, broker or carrier in the past 12 months.2 That means the majority of small firms make great sales prospects.

A carrier attuned to the special needs of small business can demonstrate how voluntary benefits work well regardless of a company’s size. Voluntary benefits allow them the opportunity to offer choice and tailored insurance plans that supplement any employer-sponsored coverage they may already provide.

Help ease concerns about benefits administration

Small companies don’t have the luxury of dedicated human resource managers and staff. Many small businesses are family-owned and -operated, with employers wearing many hats, including CEO, CFO and human resource director. They don’t have the expertise or the luxury of time to continually shop around for a benefits package that best suits their needs. With limited HR resources, they fear becoming bogged down with details. So adding more benefits can seem like a complex and overwhelming administrative burden.

With a good voluntary carrier, benefits administration can be handled seamlessly and effortlessly, making implementation streamlined and efficient.

Help them communicate their benefits package

Most small businesses don’t have the staff or resources to effectively enroll employees in their benefits, communicate the benefits and then help them understand their value. And because many enrollment companies don’t enroll small companies, you need to find a partner willing to help you enroll this market. The best benefits carriers provide the following services for both a company’s core and voluntary benefits:

  • Group meetings that provide employees with a broad understanding of their benefits program.
  • One-to-one counseling sessions with a benefits professional that help employees understand their benefits choices and the value of what their employer provides so they can make better benefits decisions.
  • Benefits statements can be a wonderful tool to help employees see the real cost and value behind their employer-provided benefits. This service is provided by some carriers at no cost.

A good benefits partner can provide a professional team of counselors to help you deliver effective enrollments and benefits communications during the initial enrollment, new hire enrollment and annual re-enrollments—at no direct cost to your clients. This is a huge advantage in the small business market where cost savings are critical.

Win big with small business

With minimal HR staffs and cost-cutting measures still in place, small companies know from experience that changes to any benefits plans sometimes appear easier said than done. Especially in today’s economic landscape, small business owners need a helping hand when it comes to their benefits programs. This leaves them with more time to focus on the things that drive revenue and profit growth.

Small businesses offer a tremendous untapped opportunity for benefits brokers. With your help, small businesses can compete in the marketplace with quality benefits packages just like the big guys.
1 U.S. Census Bureau, 2009 data.
2 No Small Matter: How Small Businesses Make Decisions about Employee Benefits, LIMRA, 2013.
3 SBA.Gov website, U.S. Small Business Administration, “Key Provisions Under the Affordable Care Act for Employers with Fewer than 25 Employees”