Small businesses (those with 25 or fewer employees) saw the expense of providing health insurance rise by nearly 30 percent during the study period -- significantly more than the hikes experienced by medium and large businesses examined by the study.
Researchers found no evidence that small businesses were more likely than large employers to quit providing health insurance for their workers, although small employers did remain less likely to provide health benefits to workers.
“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,” said Christine Eibner, author of the study and an associate economist at RAND, a nonprofit research organization. “What we don’t know is whether small companies and their employees will continue to make this tradeoff.”
The study from the Kauffman-RAND Institute for Entrepreneurship Public Policy explores trends in the economic burden of providing health insurance, the distribution of the burden for small and large businesses, and the quality of the health plans businesses offered.
Eibner examined more than 2,500 small, medium and large companies surveyed from 2000 to 2005 by the Employment Cost Index, a quarterly summary of businesses, and the Employee Benefits Survey, a periodic survey of employer health plans. Both surveys are conducted by the U.S. Bureau of Labor Statistics.
Eibner found that typical businesses offering health insurance spent between 7 percent and 10 percent of their payroll on health insurance. But small companies saw their share grow from an average of 8.4 percent in 2000 to 10.8 percent of payroll by 2005, an increase of nearly 30 percent.
In contrast, companies with 25 to 49 workers saw health insurance costs grow by 16 percent, and businesses with 50 to 99 workers saw costs grow by 25 percent. Overall, more than half of the small companies spent more than 10 percent of payroll on health insurance costs during 2005, according to the study.
One unexpected finding was that both small businesses and large businesses (those with more than 100 employees) have higher health insurance burdens than medium-sized businesses (companies with 25 to 99 employees).
Eibner said this may be because many small firms require all employees to participate in the health insurance plan, or because small companies that offer health insurance may have workers with an unusually high demand for health care and the companies don’t have the economies of scale to spread out the expense. Medium-sized businesses, on the other hand, may not require all employees to participate, which would help cut costs.
The study also found that small businesses tended to offer plans that were of slightly lower quality than those offered by larger companies. Larger businesses were more likely to offer drug and dental coverage, and non-HMO plans offered by large companies also tend to have lower deductibles and coinsurance rates.
An average worker at a small firm would expect to spend 1.9 percent of his or her annual earnings on out-of-pocket health expenses, while an average worker at a firm with more than 100 employees would expect to pay 1.3 percent of annual earnings on medical expenses, according to the RAND report.
Lisa Sodders | EurekAlert!
Microtechnology industry is hiring – positive developments of past years continue
09.04.2018 | IVAM Fachverband für Mikrotechnik
RWI/ISL-Container Throughput Index with minor decline on a high overall level
20.03.2018 | RWI – Leibniz-Institut für Wirtschaftsforschung
At the LASYS 2018, from June 5th to 7th, the Laser Zentrum Hannover e.V. (LZH) will be showcasing processes for the laser material processing of tomorrow in hall 4 at stand 4E75. With blown bomb shells the LZH will present first results of a research project on civil security.
At this year's LASYS, the LZH will exhibit light-based processes such as cutting, welding, ablation and structuring as well as additive manufacturing for...
There are videos on the internet that can make one marvel at technology. For example, a smartphone is casually bent around the arm or a thin-film display is rolled in all directions and with almost every diameter. From the user's point of view, this looks fantastic. From a professional point of view, however, the question arises: Is that already possible?
At Display Week 2018, scientists from the Fraunhofer Institute for Applied Polymer Research IAP will be demonstrating today’s technological possibilities and...
So-called quantum many-body scars allow quantum systems to stay out of equilibrium much longer, explaining experiment | Study published in Nature Physics
Recently, researchers from Harvard and MIT succeeded in trapping a record 53 atoms and individually controlling their quantum state, realizing what is called a...
The historic first detection of gravitational waves from colliding black holes far outside our galaxy opened a new window to understanding the universe. A...
A team led by Austrian experimental physicist Rainer Blatt has succeeded in characterizing the quantum entanglement of two spatially separated atoms by observing their light emission. This fundamental demonstration could lead to the development of highly sensitive optical gradiometers for the precise measurement of the gravitational field or the earth's magnetic field.
The age of quantum technology has long been heralded. Decades of research into the quantum world have led to the development of methods that make it possible...
02.05.2018 | Event News
13.04.2018 | Event News
12.04.2018 | Event News
23.05.2018 | Life Sciences
23.05.2018 | Life Sciences
23.05.2018 | Physics and Astronomy