FRIDAY, April 4 (HealthDay News) -- The economic burden of
providing health insurance for employees increased more for small
U.S. businesses than for larger businesses from 2000 to 2005, but
most small businesses have not stopped offering the benefit, a new
study finds.
The study, released Friday by the Rand Corp., of more than 2,500
small, medium and large companies found that small businesses
(fewer than 25 employees) were hit with a 30 percent increase in
the cost of providing health insurance. Their share of offering
employee health insurance increased from an average of 8.4 percent
of their payroll in 2000 to 10.8 percent of payroll by 2005.
Health insurance costs increased 16 percent for companies with
25 to 49 employees, and increased 25 percent for businesses with 50
to 99 workers.
While small companies were less likely than large businesses to
provide health insurance, the small businesses that did offer the
benefit were no more likely than large businesses to stop providing
the benefit.
"Perhaps these small businesses -- and ultimately, their
employees -- were willing to accept the burden of rising health
insurance costs, even if it meant giving up wage increases," study
author Christine Eibner, an associate economist at Rand, said in a
prepared statement. "What we don't know is whether small companies
and their employees will continue to make this tradeoff."
She did find that small businesses tended to offer slightly
lower-quality health plans than larger companies, and that larger
businesses were more likely to offer drug and dental coverage. In
addition, non-HMO plans offered by large employers tended to have
lower deductibles and coinsurance rates.
At a small company, an average worker would spend 1.9 percent of
annual earnings on out-of-pocket health expenses, compared with 1.3
percent for an average employee at a company with more than 100
workers.
The Rand Corp. is nonprofit research organization.
More information
The U.S. Department of Labor has more about
employer-based health plans.
