More than half of U.S. small businesses don't offer benefits totheir employees, according to new research.

LIMRA, Windsor, Conn., published this finding in a summary ofresults from a March 2012 telephone survey of 754 private smallbusinesses in the U.S. with one-99 employees (including the owner),the companies having been in business for at least one year. Theindividuals polled made or shared in the firms' decisionsconcerning business insurance and/or employee benefits.

The report finds that only 47% of small businesses (two-99 employees) in the U.S. offer benefitsto their employees, the lowest level in two decades of LIMRAresearch. According to the U.S. Census Bureau, 98% of businesses inthe U.S. have fewer than 100 employees, accounting forapproximately 35% of the U.S. workforce.

“The recession has had an impact on smaller employers' abilityto offer benefits, particularly those with fewer than tenemployees,” says Kim Landry, research analyst, LIMRA ProductResearch. “The weak economy caused a lot of small firms to close,while the new firms cropping up to replace them are less likely tooffer benefits.

Many small businesses are also hesitant to add new benefitsuntil the economy improves.” LIMRA's study finds that 78% of smallbusinesses in the U.S. are family-owned. Family-owned firmsexperienced a sharper decline in benefit penetration between 2005and 2012 than non-family-owned firms, with only 40% of thesebusinesses offering insurance benefits in 2012 (compared with 47%in 2005).

One quarter of small businesses are female-owned, according tothe LIMRA study. These firms tend to be smaller, produce lowerrevenue than male-owned firms, and are less likely to offerinsurance benefits (37% vs. 50% of male-owned small businesses).Among those small businesses that do offer insurance benefits totheir employees, medical and prescription drug plans are by far themost popular, and tend to be the first benefits that companiesbring on board (See Table.)

LIMRA finds that life insurance is frequently offered by small firms, whosepreference for this benefit is most likely associated with its lowcost and ease of administration. However, products such aslong-term disability, short-term disability, and accident insurancehave fairly low penetration rates among small businesses, leavingemployees at these firms potentially exposed to a variety offinancial risks.

This article was originally posted at LifeHealthPro.com, a sistersite of Credit Union Times.