Navigation Links
Study finds economic burden of health insurance increasing for small employers
Date:4/4/2008

The economic burden of providing health insurance for workers increased more for small businesses than for large ones from 2000 to 2005, but the spike did not cause a significant number of small employers to abandon the benefit, according to a study issued today by the RAND Corporation.

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 dont 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 dont 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.


'/>"/>

Contact: Lisa Sodders
media@rand.org
310-451-6913
RAND Corporation
Source:Eurekalert

Related medicine news :

1. Penn study finds pro-death proteins required to regulate healthy immune function
2. New study shows promise in reducing surgical risks associated with surgical bleeding
3. Study, meta-analysis examine factors associated with death from heatstroke
4. Study suggests loss of 2 types of neurons -- not just 1 -- triggers Parkinsons symptoms
5. Study says COPD testing is not measuring up
6. Preclinical study suggests organ-transplant drug may aid in lupus fight
7. Ability to cope with stress can increase good cholesterol in older white men, study finds
8. High alcohol consumption increases stroke risk, Tulane study says
9. Mailman School of Public Health study examines link between racial discrimination and substance use
10. Pitt study finds inequality in tobacco advertising
11. Stanford study highlights cost-effective method of lowering heart disease risks
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:4/29/2016)... ... April 29, 2016 , ... Dr. Robert Mondavi, one of the ... smiles. Cosmetic dentistry is a fast-growing field as more patients are discovering the many ... learn more about the options currently available to them and which ones might work ...
(Date:4/29/2016)... ... , ... Reltok Nasal Products proudly announces that Boston Medical Products, Inc., a ... throat specialty, has added the KOTLER NASAL AIRWAY™ to its diverse product line. , ... patented safety device secured by nasal surgeons onto the floor of the nasal passages, ...
(Date:4/29/2016)... ... April 29, 2016 , ... ... growth round of funding led by Eastside Partners, with participation from existing investor ... growing customer base and accelerate its technology and product roadmap. , ...
(Date:4/29/2016)... ... April 29, 2016 , ... Regenerative Medicine Solutions ... to Work employee satisfaction survey, earning them second place for Tampa’s Best Places to ... employees. , “This is a great accomplishment for our team,” says RMS Human ...
(Date:4/29/2016)... ... April 29, 2016 , ... The infertility specialists at HRC Fertility/Orange County (HRC/OC) ... Daniel A. Potter -- are proud of the recent release of their 2014 in ... SART published the latest verified data for 375 U.S. member clinics. *Preliminary ...
Breaking Medicine News(10 mins):
(Date:4/29/2016)... -- Glycotope GmbH, a clinical-stage immuno-oncology company ... of Dr. Alfredo Zurlo as Chief Medical ... many years clinical experience and a proven track record ... was at Mologen AG where he was Chief Medical ... Zurlo held various positions at F Hoffmann La Roche ...
(Date:4/28/2016)... 2016 Research and Markets has ... Products Market 2016-2020" report to their offering. ... The global plastic surgery products market is expected ... period 2016-2020. , ,The growing adoption of laser in ... of the market. Lasers are used to treat a ...
(Date:4/28/2016)... YORK , April 28, 2016 ... online consumer insights on healthcare, announced today that it ... their report Cool Vendor in Life Sciences, 2016, ... April 15, 2016.  The report focuses on life-science- oriented ... gain insight from patients and doctors, confirm medication ingestion, ...
Breaking Medicine Technology: