Snapshot from 2012 Employer-Sponsored Health Benefits Survey

In 2012, the Henry J. Kaiser Family Foundation and Health Research & Educational Trust (HRET) conducted a survey of employers to identify trends in employer-sponsored health coverage, including premiums, employee contributions, cost-sharing provisions, and other relevant information. Survey results were published as the 2012 Kaiser/HRET Employer Health Benefits Survey (EHBS).

The 2012 EHBS included 3326 randomly selected public and private firms with 3 or more employees (2121 of which responded to the full survey and 1205 of which responded to an additional question about offering coverage). The Kaiser Foundation recently released a snapshot of survey results, focusing on differences in offer rates, plan costs, and cost sharing between small firms and large firms. Small firms were defined as employers with 3 to 199 workers; large firms had ≥200 workers.

Of the >3 million firms with ≥3 workers in the United States, 98% have between 3 and 199 workers. Small firms employ 39% of all workers and 33% of workers who receive health insurance through their own job.

Small firms are much less likely to offer health insurance compared with large firms. According to the 2012 EHBS results, 61% of small firms offer health insurance, compared with 98% of large firms. Of firms with 3 to 9 workers, only 50% offered health insurance in 2012. In response to the survey, 48% of small firms that did not offer health insurance said cost was the primary reason for not offering coverage.

Another component of coverage assessed by the survey was the percentage of workers at firms that offer coverage who are not covered by the available benefits, either because they are not eligible or they have chosen not to elect coverage. Percentages of covered workers at firms offering benefits are 61% in small firms and 62% in large firms. However, the EHBS notes that the lower offer rate at small firms means a smaller percentage of workers are covered: 47% of workers at both offering and non-offering firms are covered by health benefits at small firms versus 62% at large firms.

Small firms are also less likely to offer health benefits to part-time workers compared with large firms (28% vs 45%, respectively); the same pattern applies to temporary workers (2% in small firms vs 6% in large firms).

The number of services covered by health plans also varies across firms. Small firms are less likely to offer separate dental and vision benefits; 89% of large firms offer dental benefits compared with 53% of small firms. The percentages for vision benefits offered are 62% of large firms and 27% of small firms.

There are variations in average premiums as well. Workers in small firms pay $15,252 for family coverage compared with $15,980 for workers in large firms. The report’s authors noted that the difference in premiums paid for single coverage is not statistically significant. The authors commented, “Given that health insurance provided to small firms has higher administrative and marketing costs than health insurance provided to large firms, the lower average small firm premium for family coverage suggests that health insurance benefits are probably less generous on average in small firms.”

Overall, survey results demonstrated that the accessibility, affordability, and coverage of employer-sponsored health insurance varied greatly for small and large firms, with the smallest firms about half as likely to offer coverage to their employees compared with large firms.

The report concluded with a note regarding the impact of the Patient Protection and Affordable Care Act (ACA) on employer-sponsored health insurance. Effective 2014, the ACA will require employers purchasing insurance in the small group market to ensure that their benefits meet essential health benefits standards, established by individual states. “While the ACA will meaningfully impact the availability and scope of insurance coverage, many of the contributing factors to the differences in cost sharing and premiums between small and large employer health benefits are likely to remain,” the authors commented.