May 7, 2018 by Michael Guta
Affordable Small
Business Health Insurance Almost Out of Reach
Compared to individual
coverage, small business plan premiums are faring better when it comes to price
increases, the report says. While the national average premium coverage for
small businesses increased by eight percent between 2016 and 2017, it was at
least double that for individuals. Still, any increase will impact how a
business budgets its operations.
This is because the
margins in which many small businesses operate leave very little room for
fluctuations in prices. Thus any increase in a product or service can have a
negative impact on overall operations. In most cases, this means making due
with less or without and adapting to market conditions. And this is what very
small businesses and individuals have done.
In a press release,
eHealth CEO Scott Flanders explains what happened as prices for individuals and
families continued to rise in 2017. Flanders says, “More owners of very small businesses — of two or three
employees — began enrolling in small group health plans. Some never knew they
qualified for small business group coverage, but in many cases it offered them
more flexibility and lower prices per person than individually purchased health
insurance plans.”
The report was compiled by
analyzing applications received by eHealth from employer groups in 2017 and a
March 2018 survey of small business owners who purchased group health coverage
at eHealth. The companies being surveyed had less than 30 employees each.
How
are Small Businesses Impacted by the Cost of Health Insurance?
When discussing their ability
to continue paying for their employees’ health insurance, 78 percent of
respondents said they were somewhat or very concerned.
For 30 percent of business
owners, this concern was delaying new hires, while 61 percent said it affected
their ability to provide bonuses and offer raises to their employees.
Policies were also addressed in the report, and small
business owners said the repeal of the individual tax penalty in the Affordable
Care Act will not change their strategy. Nearly all or close to 95 percent
responded the repeal will not stop them from providing health coverage to their
employees.
Why
Do Small Businesses Offer Coverage?
The report concluded by asking
why small businesses offer healthcare coverage? And the answers are not
surprising. According to the report, 40 percent provide benefits because they
have a sense of responsibility or moral obligation to do so, 47 percent provide
benefits as part of a larger more comprehensive package and 64 percent consider
it a business strategy to attract and retain the best workers.
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