Most Small Businesses Not Planning for Health Care Reform According to Survey

Survey of true “small businesses” explores how employers feel about health care reform, why they provide coverage, and how far they’re willing to go to save money

Mountain View, CA – March 21, 2012 – The majority (85%) of small businesses are not making changes or long-term plans based on health care reform legislation, according to a recent survey of small business owners released today by eHealth, Inc.

Beginning in 2014, the Patient Protection and Affordable Care Act of 2010 (ACA) requires businesses with the equivalent of fifty or more full-time employees to provide health insurance coverage for their workers. However, businesses with fewer than 50 employees are exempt from this requirement, although employees may be required to purchase their own coverage.

eHealth’s Small Employer Health Insurance Survey focuses on these small businesses, many of them family-run. Nearly nine-in-ten (88%) of the small businesses responding to the survey had ten employees or fewer. The survey was conducted anonymously online between February 10 and March 13, 2012 and gathered responses from a total of 236 small businesses that had purchased group health insurance policies through eHealthInsurance.com.

Based on their size (fewer than 50 employees) none of the businesses surveyed would be required by the ACA to offer health insurance coverage to employees in 2014. However, the majority (60%) planned to continue offering coverage for their employees in 2014. Among those employers who considered themselves knowledgeable about aspects of the ACA, a larger majority (69%) said they had no plans to stop offering coverage to employees. According to the survey, most employers feel they have a moral obligation to provide health insurance for employees or feel they need to continue to do so in order to recruit and retain talented workers.

Small businesses are still sensitive to health care costs, however, with nearly all respondents (95%) citing “affordability” as one of the two most important factors when choosing a plan. Small businesses are also open to creative solutions to reduce health coverage costs. Many are willing to drop benefits like dental and vision (58%) or consider raising deductibles and offering accident or critical illness coverage (74%) in order to keep costs lower and continue offering employees health insurance.
eHealth’s Small Employer Health Insurance Survey report can be downloaded in full here or through the eHealth, Inc. Media Center.

Additional Survey Results

  • Nearly eight-in-ten small businesses (79%) report spending $200 or more for health insurance per insured employees or dependent each month
  • A majority (53%) said they required employees to contribute 10% or less of the total cost for their own or their dependents’ monthly health insurance premiums
  • More than six-in-ten (61%) reported that enrollee deductibles on their group health insurance plans were $1,500 or less per year
  • One-third of respondents (34%) said they might consider dropping employer-based group health insurance beginning in 2014
  • A majority of respondents (53%) said that they always or sometimes impose waiting periods before allowing new employees to join the company health insurance plan
  • More than four-in-ten (44%) said they felt a “moral obligation” to provide employees with health insurance
  • Most small businesses identified “affordability” (95%) and “richness of benefits” (68%) as the two most important factors when choosing a health insurance plan
  • Only six percent considered the insurer’s brand a top-two factor when choosing a plan
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