Benefits

Small-Business Workers Least Likely To Be Insured

November 1, 2012 (PLANSPONSOR.com) – The number of U.S. workers in small businesses who were offered, eligible for and covered by health insurance through their jobs has declined over the past decade. 

By Kristen Heinzinger editors@plansponsor.com | November 01, 2012
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During this time, the number of people younger than age 65 covered by employer plans has fallen from 68% to 57%, according to a report by The Commonwealth Fund. Less than half (49%) of workers in companies with fewer than 50 employees were both offered and eligible for health insurance through their jobs in 2010, down from 58% in 2003.

In contrast, about 90% of workers in companies with 100 or more employees were offered and eligible for their employer’s health plans in both 2003 and 2010 and approximately seven of 10 were covered by their companies’ health plan in both years. Workers in the smallest firms—and those with the lowest wages—continue to be less likely to get coverage from their employers and more likely to be uninsured than workers in larger firms or with higher wages.

According to a 2006 analysis, small businesses, on average, pay nearly 18% more for the same benefits than large firms. These higher rates are the result of a number of factors: the ability of insurance carriers in many states to charge small firms higher premiums based on the health, age, and gender of their work forces, as well as the type of business it is, and because of higher per-employee administrative costs, including broker commissions.

Among workers in firms with fewer than 50 employees, only one-third (34%) of those earning less than $15 an hour were offered and eligible for health benefits at their job in 2010 and only 18% were covered by their companies’ health plans. In contrast, 70% of workers in small firms who earn $15 or more per hour were offered and eligible for health benefits and half (53%) were enrolled in health plans.

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