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Employer-based

Why Don't More Small Businesses Offer Health Insurance?

Jill Yegian and Eleanor Murray

April 2002

When it comes to employment-based coverage, size matters. Small businesses are much less likely to offer health insurance to their workers than are large businesses. Why don't more small businesses offer health insurance? What can we learn from the characteristics, attitudes, and knowledge level of businesses, both those offering health insurance and those not offering, that can inform efforts to expand access to health insurance and reduce the number of uninsured?

These two publications (summary report and detailed findings) are based on findings from a 2000 survey, conducted by William M. Mercer, Inc., that sought to increase understanding of employer-sponsored health insurance among small firms (2 to 50 employees) in California.

The summary report outlines key findings from the survey, such as:

• Businesses not offering health insurance tend to be smaller, rely more heavily on the part-time workforce, and employ lower-wage workers than those offering health insurance.
• Businesses that offer health insurance are much more likely to believe that offering health insurance is important and beneficial for business.
• Businesses not offering health insurance tend to underestimate substantially the cost of health insurance.
• Businesses, both those offering and not offering health insurance, know relatively little about regulatory protections, tax deductibility of insurance premiums, and market options.

The summary report and the detailed findings can be found under Document Downloads below.

The data used in these reports are publicly available at the Inter-university Consortium for Political and Social Research (ICPSR) Web site through the link below.

Document Downloads

Why Don't More Small Businesses Offer Health Insurance? Summary Report (324K)

Why Don't More Small Businesses Offer Health Insurance? Detailed Findings (363K)

External Links

Inter-university Consortium for Political and Social Research Web Site

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