Smallest businesses’ health plans wither
Only half maintain coverage for workers
Only half of America’s smallest businesses now offer health coverage to their workers because many say steady cost hikes have made it too expensive to afford a benefit that nearly all large employers still provide.
The Kaiser Family Foundation said Tuesday that 50 percent of companies with three to 49 employees offered coverage this year. That’s down from 59 percent in 2012 and 66 percent more than a decade ago.
“There’s just not as much money around for compensation, including benefits,” said Gary Claxton, a Kaiser vice president and lead author of the nonprofit health policy organization’s annual health benefits study.
Employer-sponsored coverage is the most common form of health insurance in the United States, covering an estimated 151 million people under age 65, according to Kaiser. The federal Affordable Care Act requires all companies with 50 or more fulltime employees to offer it.
Companies get a tax break for offering these benefits, and many employers also see them as a critical tool for attracting and keeping workers, even if they aren’t required to because they are small or rely on part-time workers. Kaiser found that 96 percent of businesses with 100 or more workers provided health benefits.
Cost was the main reason cited by 44 percent of those small businesses that don’t offer benefits, Kaiser’s study found. Seventeen percent said they were too small to offer coverage.
The cost of coverage, known as the premium, for an employersponsored family plan climbed 3 percent this year to $18,764 on average, according to the survey of more than 2,000 businesses Kaiser conducted with the Health Research & Educational Trust.
Cost increases have been more modest in recent years and much smaller than the double-digit percentage hikes seen on the ACA marketplaces. Even so, years of smaller increases add up, and insurance costs routinely climb faster than inf lation. That means the health insurance costs that employers face have climbed faster than what they can charge for products and services, and that has pushed the benefit out of reach for many business owners.