Small employers consider health insurance too costly for both themselves and their employees, according to the 2000 Small Employer Health Benefits Survey released last week.
Those concerns also are compounded by misperceptions of the business value of health benefits, tax deductions for employers and employees and recent state and federal regulatory
changes that have restructured the small-employer health insurance market.
Although policymakers have long recognized the disproportionate rates of employees who lack insurance coverage at small companies, targeted strategies have had limited success.
Nearly one-third of workers in companies with 25 or fewer employees are uninsured, according to the survey.
Some of the top drivers of this lack of health coverage include:
- Affordability: 53% of small employers that do not offer health insurance cited high healthcare costs as a key obstacle and more than one-third said their
employees couldn't afford it.
- Dependent coverage: 27% of small employers that offer dependent coverage say employees declined the coverage because it was too expensive.
- Misperceptions about volume rates: 80% of respondents were not aware that most states require insurers to spread the claims cost of small employers with sick
employees across a larger pool through rating restrictions. More than 65% did not know there are regulatory limits to how much insurers can charge employers.
(Employee Benefit Research Institute, http://www.ebri.org)