The implementation of the Affordable Care Act will make a real difference to the competitiveness of minority-owned small businesses, and will help improve access to affordable health care coverage for both small business employers and their employees. For small businesses, low-cost and high-quality health care coverage means increased profits, higher wages, and the ability to attract and retain skilled employees. The cost of sponsoring health insurance for their employees is the top concern for small employers, and racial and ethnic minority entrepreneurs are no exception.
Minority-owned businesses are 5.8 million strong, and growing. Generating over $1 trillion each year, they continue to build their presence across local communities and 41 countries worldwide. Between 2002 and 2007, the growth of businesses owned by minorities outpaced the growth of nonminority-owned businesses. These entrepreneurs are important contributors to local markets, but they are also crucial to developing national economic competitiveness.
Of minority-owned enterprises, 1.6 million are owned by Asian Americans. Of those businesses with fewer than 100 employees, nearly 2.3 million are owned by Hispanic Americans and nearly 2 million are owned by African Americans. Nearly 2 million minority employers are women. The diversity of minority employers is present in virtually every sector of private industry, yet many of them encounter similar disadvantages.
As racial and ethnic minorities, these employers, employees, and their families experience significant health disparities, which are aggravated when they are unable to access affordable health care coverage. Many small employers are unable to access coverage for themselves or their employees. Because insurers consider these employers “small groups,” small businesses are not as likely as large groups (large employers) to spread risk. Small businesses are often considered high-risk groups, so insurers charge them high costs. These high costs keep many small employers from offering health benefits, and when small business employees do obtain health coverage through their employers, they tend to have less generous plans than employees at large businesses.
For more on this topic, please see:
- Better Health Means Better Business by Isabel Perera and Lesley Russell