The cost of health insurance is on the rise, both for individuals and for small businesses purchasing group coverage for their employees. According to a new survey from insurer eHealth, the vast majority of small business owners are worried about this trend.
On a per-person basis, the cost of small business coverage selected at eHealth increased by 8 percent between 2016 and 2017, after decreasing by 1 percent between 2015 and 2016. By contrast, average premiums for individuals purchasing their own health insurance increased 18 percent between the 2016 and 2017 open enrollment periods and 16 percent between the 2017 and 2018 open enrollment periods.
About 80 percent of small business owners say they're worried about the cost of coverage. More than six in 10 said that a 15 percent increase in premiums would make their current group health insurance coverage unaffordable, potentially leading them to shop for more affordable options or contribute less to employee premiums.
More than 6 in 10 small business owners also said they offer health insurance coverage to help them hire and retain the best workers. But of those, 61 percent say the cost of small business coverage has limited their ability to award employees bonuses or offer raises.
Indeed, the cost of coverage can influence business decisions. About 30 percent of respondents said they have delayed hiring new employees in the past due to the cost of providing employer-sponsored health insurance.
The survey also showed that the impact of the Affordable Care Act was minimal. Only 21 percent of respondents said they faced increased pressure from employees to provide health insurance when major provisions of the ACA took effect in 2014; 79 percent felt no additional pressures from employees.
A majority of small business customers purchased silver plans in 2017; 47 percent of small business owners say they currently pay 75-100 percent of their employees' monthly premiums, the survey showed.
Starting in 2019, people will no longer face a tax penalty for going uninsured. Nearly all of the respondents, 95 percent, said the repeal of the tax penalty will not tempt them to stop offering coverage to their workers.