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Small Business Employee Benefits and HR Blog

Small Employers Less Likely to Offer Health Insurance

The Kaiser Family Foundation published their annual Employer Health Insurance Survey, which provides a detailed look at trends in employer-sponsored health insurance. This year’s survey covered the cost of employer sponsored health insurance, health benefits offer rates, employee coverage, eligibility and participation, and other pertinent information.

2014 Employer Health Benefits Survey Background

The Kaiser Family Foundation surveyed 2,052 non-federal public and private employers with three or more employees. Phone interviews were conducted from January to May of 2014. Out of the 2,052 interviewed, 1,587 employers completed the survey.

Employer Health Benefits Survey Key Findings

  • Employer-sponsored health insurance premiums have increased an average of 3 percent in 2014 for family coverage, and 2 percent for single coverage.

  • Only 55 percent of employers surveyed offer health benefits to at least some of their employees.

  • The average firm that offers health insurance offers it to 62 percent of their workforce.

  • Enrollees in grandfathered health plans dropped to 26 percent from 36 percent in 2013.

  • Annual employer-sponsored premiums for single coverage are at $6,025 in 2014.

  • Employees contribute an average of $1,081 toward single coverage in 2014.

Average Family Premium Has Increased 69 Percent Over the Last Ten Years

The average annual family premium in 2014 was $16,834. This is an increase of 26 percent in the last five years and 69 percent in the last ten years.Family_Coverage_Employee_Contribution

Chart: Kaiser Family Foundation

Cost Remains the Primary Reason For Not Offering Benefits

  • Among smaller employers (3 to 199 employees) that do not offer health benefits, 32 percent of employers cited the cost of health insurance remains the primary reason for not offering health insurance to their employees.

  • Almost a quarter (24 percent) of small employers cited that their “employees are generally covered under another plan.”

  • Nine percent of employers cited that their “employees have other options, including exchanges.”

  • One percent cited that their employees could get a better deal on the exchanges.

  • Twenty four percent of those small employees not offering health insurance shopped for coverage within the past year.

small_firms_not_offering_benefits

Chart: Kaiser Family Foundation

Small Employers Less Likely to Offer Health Insurance

The survey reported that small employers (3-199 employees) are significantly less likely to offer health insurance to their employees than large employers:

  • Less than half (44 percent) of small employers with three to nine employees offer health insurance.

  • Over half (64 percent) of firms with 10 to 24 employees offer health insurance.

  • Eighty three percent of firms with 25 to 49 employees offer health insurance.

  • Ninety one percent of firms with 50 to 199 employees offer health insurance.

percentage_of_firms_offering_benefitsChart: Kaiser Family Foundation

SHOP Exchange Too Expensive for Small Employers

The Small Business Health Options Program (SHOP) is available to small employers with less than 50 Full Time Equivalent (FTE) employees. The survey asked smaller employers (3 to 75 employees) about the SHOP exchange.

  • Thirteen percent of smaller employers who do not offer health benefits reported shopping for coverage on a SHOP exchange.

  • Twelve percent of smaller employers that do offer health benefits looked at SHOP coverage.

  • Forty percent of smaller employers did not select shop coverage because they were not interested.

  • Twenty eight percent of smaller employers reported that it was too expensive.

  • Ten percent of smaller employers reported that the SHOP is too much of a hassle.

shop_too_expensiveChart: Kaiser Family Foundation

Read the full survey at Kaiser Family Foundation