Small employers not likely to purchase traditional group health insurance

MedSave Admin | October 28, 2008

Results of a Mercer survey published in today's Wall Street Journal;

of about 3,400 small business employers questioned found that 43% of those employers without health coverage said they couldn't afford it. And 59% of those without coverage said they would be willing to spend no more than $50 per employee a month for it.

The data suggest, Mercer concludes, that it could be very difficult to get small-business owners to support state or federal initiatives, like Barack Obama's health-care proposal, that would mandate that many small employers buy health insurance for their workers.

Small Firms' Take On Insurance Reform - WSJ.com

We presume that those employers who were not willing to spend more than $50 per employee per month do not believe this is a realistic budget for insurance and therefore conclude that they cannot afford coverage. But even if coverage was available at this low price, we suspect few firms without insurance would change their policy and purchase employee health insurance.

The real issue is that employers will not change their stance on employee health coverage unless required to do so by law. MedSave.com opposes mandated employer-provided health coverage despite the fact that it would be great for our business.

For those businesses that really do want to make a change:

The best approach for a small firm that does not currently offer employee health insurance but feels pressure to offer something now is a "starter" limited benefit insurance plan that fits within the $50 per month budget that the majority of these employers are willing to pay. After all, a little coverage is better than none at all. It is always possible to increase benefit later if circumstances permit.

The only group health insurance plans that typically fall into this ultra-low cost range are Basic Health Insurance and sometimes Value Benefits. If the employer wants to split costs with the employee (as is typically done at larger firms like Walmart) then the range of health insurance options is increased. In the $100+/- per month range the lower level of Value Health USA provides the ability to leverage premium dollars into a respectable mini-med coverage.

Tags : small business health insurance

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