The eHealth Report, Small Business Health Insurance: Costs, Trends, and Outlook 2017 (PDF) outlines the concerns of small business owners regarding the cost of health coverage. Nearly 80 percent said they worried about the cost. And 62 percent say that a 15 percent increase in premiums would make group health insurance unaffordable.
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Compared to individual coverage, premiums for small business plans are better at rising prices, the report says. While the national average premium coverage for small businesses increased by eight per cent between 2016 and 2017, it was at least twice that of individuals. However, any increase will affect the way a company budgets for its operations.
Indeed, the margins in which many small businesses operate leave very little room for price fluctuations. Thus, any increase in a product or service can have a negative impact on the overall operations. In most cases, this means doing with less or without and adapting to market conditions. And that's what very small businesses and individuals have done.
In a press release, Scott Flanders, CEO of eHealth, explains what happened: the prices of individuals and families continued to rise in 2017. " More than very small business owners with two or three employees started enrolling in small group health plans.Many people never knew that they were eligible for group coverage for small businesses, but in many cases, they offered them more flexibility and lower prices than individual health insurance plans. "
The report was compiled by analyzing applications received by eHealth from employer groups in 2017 and a March 2018 survey of small business owners who purchased group health coverage in eHealth. The companies surveyed each had fewer than 30 employees.
How are small businesses affected by the cost of health insurance?
In terms of their ability to continue paying for health insurance for their employees, 78% of respondents say they are somewhat or very worried.
As mentioned earlier, this affects business decisions. For 30% of business owners, this delayed hiring, while 61% said it affected their ability to provide bonuses and offer increases to their employees. But homeowners do everything they can to support their workers.
At eHealth, 47% of small businesses reported that they currently pay 75% to 100% of their employees' monthly premiums. And for 6 out of 10 companies, health coverage is used to help them hire and retain the best workers.
Policies were also addressed in the report, and small business owners said that repealing the individual tax penalty in the ACA will not change their strategy. Almost all or nearly 95% responded that the repeal would not prevent them from providing medical coverage to their employees.
Why do small businesses offer protection?
The report concludes by asking why small businesses offer medical coverage? And the answers are not surprising because they are based on a sense of responsibility or moral obligation (40%), benefits for their employees (47%) and a business strategy (64%).
You can download the full report here (PDF).
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