Small businesses have affordable coverage options

The survey includes premium and benefit data from more than 650,000 small companies (those with 50 or fewer employees), covering 4 million workers and 3.2 million dependents.

Key survey findings include:

• Small-group premiums in 2006 were slightly lower than those reported in the 2005 Kaiser Family Foundation survey of employers, despite an additional year’s increase in health costs. Premiums in the Kaiser survey for all firms with three or more employees averaged $335 per month ($4,024 annually) for single coverage, and $907 per month ($10,880 per year) for family coverage in 2005.

• In 2006, the average premium for small-group health insurance was $311 per month ($3,730 per year) for single coverage and $814 per month ($9,770 annually) for family coverage.

• In terms of benefit design, most small-business employees are covered by PPO and HMO products, while HSA-eligible health plans are quickly establishing a presence in the small group market.

• Among small-group enrollees, 57 percent had preferred-provider-organization coverage in 2006, with both in-network and out-of network benefits. Thirty-nine percent had health-maintenance-organization coverage, often with a point-of service option. Approximately 4 percent of enrollees had a health savings account benefit, with a qualifying high deductible health plan.

• More than 10 percent of small group enrollees had a choice of two or more benefit plans. Of workers offered an HSA plan, approximately one-third also had a choice of a PPO or HMO/point-of-service plan.

Almost half (46 percent) of enrollees in small groups chose HSA/high-deductible health plans when offered a choice of HSA plans and other types of health plans.

• Within the small-group market, premiums fell slightly as firm sizes increased. Firms with 26 to 50 employees paid an average of $287 per month for single coverage, while firms with 11 to 25 employees paid an average of $299 per month, and firms with 10 or fewer employees had average single premiums of $330 per month.

“Small businesses need affordable products for their employees, and health insurance plans are responding by offering innovative product designs with lower premiums,” said AHIP President and CEO Karen Ignagni in a news release.

“Without a doubt, policymakers could do more to give health insurance plans greater flexibility to provide even more affordable products for all businesses,” she said.

“Policymakers should focus on reforming the medical liability system, supporting programs that measure and reward quality care, and developing a system to evaluate the safety, efficacy and cost-effectiveness of new technologies to ensure they provide better value than existing treatments.”

AHIP is a national association that represents nearly 1,300 member companies in the health insurance industry.[[In-content Ad]]