The Disadvantages of Not Offering Insurance Benefits to Employees in an E-Business

It’s becoming increasingly possible to launch business ventures that are entirely virtual. Some companies no longer have a brick-and-mortar office where employees come to work for eight hours a day. Many now connect their employees and their customers entirely electronically. While the technology exists, the rules in this new way of doing business are constantly evolving. One big question for e-businesses is whether to offer a benefits package similar to those of traditional companies.

  1. Retention and Loyalty

    • One of the biggest downsides to deciding not to offer a benefits package is that your business may not retain quality staff. While many e-commerce workers tend to be younger, and not as concerned with health care benefits as older workers, that will not always be the case. As your more experienced and valuable employees marry and have families, health care becomes an issue, and they may look elsewhere if you’re not providing it.

    Protecting Key Employees

    • As an e-business, you probably have several employees who are essential to what you do. These may be the people who have the highest technical skills and who allow you to maintain your innovative edge. While having health insurance does not necessarily protect them from getting sick or injured, it can encourage them to get regular check-ups and to visit the doctor if the need arises. The last thing you want is for your key employees to be worrying about how to pay medical bills.


    • E-commerce enterprises tend to come and go. It’s a newer industry, and there’s a lot of attrition of those companies that didn’t think through their business model or misread the market. Only those that survive and manage to prosper can afford to offer health benefits. Not offering such benefits might be read by some as a sign that you are not confident of the future of your business. Offering insurance benefits makes your operation appear more legitimate.


    • Federal healthcare legislation stipulates that by 2014 all companies with 50 or more full-time employees must offer insurance benefits to their employees or pay fines. If your e-business is in this category, you must take steps to comply with the law or face penalties.

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