Purchasing Health Insurance
• Forty-seven (47) percent of small employers offer employee health benefits of which 36 percentage points offer insurance to all or most full-time employees, 5 percentage points offer insurance to some or a few full-time employees, and 6 percentage points offer premium reimbursement to employees who purchase health insurance on their own. Thirteen (13) percent purchase other employee health benefits. However, most of these purchases are made by small employers who already offer health insurance and are complementary rather than in lieu of insurance benefits.
•Excluding those who switch insurers or go out of business, very few small employers drop health insurance — about 1 - 2 percent of the population annually. The reason for stagnation or decline in the number of small businesses offering employee health insurance, therefore, appears to be that owners of new firms are increasingly reluctant to offer it.
•The owner or a designee shopped for employee health insurance on behalf of 48 percent of small, employing businesses in the last three years. Representatives of larger, small businesses were substantially more likely to shop than representatives of smaller ones. Those who already offer employee health insurance were substantially more likely to shop than those who offer none.
•The owner or manager is the person most likely to shop on behalf of the firm for employee health insurance (46%). Twenty–three (23) percent delegate the task to an employee and 27 percent delegate it to an insurance agent or broker.
• Small employers shopping for employee health insurance contacted (searched) the following potential sources: the Internet (24%), a network of health care providers (48%), government (16%), business organizations or trade groups (34%), and insurance agents and/or brokers (87%).
• Seventy-one (71) percent offering employee health insurance purchased it most recently through an insurance agent or broker, 11 percent directly from an insurer (not over the Internet), 8 percent through a business organization, 5 percent directly from a network of providers, 2 percent through or from government, and 1 percent directly from an insurer over the Internet.
• Small employers rely heavily on agents or brokers for guidance on health insurance matters. That does not always serve them well. Agents/brokers, for example, did not raise the subject of Health Savings Accounts (HSAs) in 59 percent of cases involving their discussion of employee health insurance with small employers.
• Most small employers directly affected by “pay or play” legislative proposals would adjust primarily by altering the terms of employment. The treatment of part-time employees would have a significant affect on the small business response.
• Forty-three (43) percent of small employers offering employee health insurance (or premium reimbursement) spend 7.5 percent or more of payroll on employee health benefits. That figure translates into about 20 percent of all small employers who allocate at least 7.5 percent of payroll expenditures to employee health. About 5 percent spend 15 percent or more of payroll.