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Employer-based

Employer-Sponsored Health Insurance among Small Businesses

William M. Mercer, Inc.

April 2002

This publication provides information on health insurance purchasing decisions and the characteristics of health benefits offered by small businesses in California. The report is based on an annual survey, conducted by William M. Mercer, Inc., among small California businesses. Results from both the 1998 and 2000 surveys are presented. The main objectives of the report are to describe the health benefits offered by small businesses in California, including plan type, cost, and employee contributions; and to compare health benefit information collected in California and national data on small businesses.

Key findings include:

• More than two-thirds (69%) of small California employers offer health coverage to at least some of their employees. This ranges from 64% for employers with 2 to 9 employees to 89% for those with 25 to 50 employees.
• When coverage is offered, most employees -- 82% on average -- are eligible, and most of those who are eligible (83%) elect to enroll in the plan. About half of those who enroll elect dependent coverage.
• The type of health plan most commonly offered by small California employers is the HMO (60% of plan sponsors), followed by the PPO (44%). Only 11% offer a point-of-service plan and just 4% offer a traditional indemnity plan. Typically, only one type of plan is offered to employees; just 16% of sponsors provide a choice of plan types at their largest worksite.
• Total health benefit costs averaged $2,918 per employee in 2000 among small California health plan sponsors (this includes employer and employee contributions to the cost of medical plans and, when offered, dental and vision plans, for all active enrolled employees and their covered dependents). These employers experienced a cost increase of 5.8% from 1999 to 2000.

The full report may be found under Document Downloads below.

The complete data set used in the 2000 report are publicly available at the Inter-university Consortium for Political and Social Research (ICPSR) Web site through the link below.

Document Downloads

Employer-Sponsored Health Insurance among Small Businesses (303K)

External Links

Inter-university Consortium for Political and Social Research Web Site

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