Most small employers (53%) said the business couldn’t afford it, while 40% said revenue was too uncertain to make the commitment.
Still, a full 43% said that employees have coverage elsewhere, and 37% said their employees couldn’t afford it, according to a new study by the Employee Benefits Research Institute (EBRI).
Nearly half (48%) of those employers not offering health coverage pay annual wages of $15,000 or less to 50% or more of their workforce, compared with 12% of those companies that do sponsor the programs.
Those not offering health benefits are more than twice as likely to have annual gross revenues less than $500,000, according to the survey. They are also more likely to employ larger numbers of females, workers under 30 or minority workers than other firms.
Eighty-three percent of those not offering health coverage employ fewer than 10 workers.
Difference of Opinion
Those employers offering the programs believe that they help recruitment (78%), improves retention, employee attitude and performance (75%), impacts the health of their employees (67%) and reduces absenteeism (58%).
Ironically, those that don’t offer the programs have a nearly opposite perspective, with 72% noting no impact on recruiting, 78% citing no impact on attitude, performance or retention, and 85% see no impact on absenteeism.
What It Would Take
The study also considered what might encourage smaller employers to offer the programs, and found that these companies would seriously consider it, if:
- 64% – if the government provided assistance with premiums (42% said they would need a subsidy of at least 50% of the premium cost)
- 57% – if there were an increase in profits
- 50% – if employees demanded it
- 43% – if insurance costs fell 10%
- 36% – if it improved retention and recruitment
The study found employers who don’t offer coverage were
ill-informed about the possible tax advantages to both
company and employee.
Over a third (34%) had changed health plans in the past year, and 63% have done so within the past five years. Of those changing in the past five years, nearly all cited cost/price as their motivation.
The 2000 Small Employer Health Benefits Survey was co-sponsored by the Blue Cross Blue Shield Association, the Employee Benefit Research Institute (EBRI), and the Consumer Health Education Council (CHEC). Mathew Greenwald & Associates, Inc., conducted the survey of 506 companies with – and 449 companies without – health benefits.
You can find more information about the survey at http://www.ebri.org/sehbs/index.htm