A study of more than 477,000 small employers (50 or feweremployees) revealed high premiums fell as population increased anda strong preference for PPOs.

America's Health Insurance Plans(AHIP) conducted a study in 2010 of approximately 3.7 millionworkers, including more than 70 percent who were in small groups ofless than 10 employees. The study found average premiums of $426($5,107 annually) for individuals and $1,117 ($13,409 annually) forfamilies.

However, within the small group market, premiums fell as firmsized increased. Companies with between 26 and 50 employees paid anaverage of $406 per month for single coverage, while firms withbetween 11 and 25 employees paid an average of $419 per month forsingle coverage, and firms with 10 or fewer employees had averagemonthly premiums of $446 for single coverage.

Plan choices ranged across the board, though PPO plans wereoverwhelmingly chosen by the majority of small groups (68 percent).Twenty-three percent had a health maintenance organization, oftenwith a point-of-service (POS) option, while 7 percent of enrolleeshad a health savings account (HSA) benefit, with a qualifyinghigh-deductible health plan (HDHP). Health reimbursement accounts(HRA) with a qualifying HDHP and indemnity plans made up theremaining 2 percent of enrollees.

Additional survey findings included:

• Premiums varied widely by state. A high of $565 ($1,483 forfamily coverage) was recorded in West Virginia, while there was alow of $302 ($793 for family coverage) in North Dakota. Factorsaffecting premiums include state regulatory rules and ratingrequirements, health status or health risk factors among state orlocal residents, state premium taxes or assessments, the cost ofhospital and physician services in local areas and the types ofproducts chosen, and degree of deductibles or other cost-sharingpurchased by small businesses.
• Roughly two-thirds of the states have adopted premium ratingrules designed in the early 1990s by the National Association of InsuranceCommissioners (NAIC), which allow rates to be adjusted fordemographics of enrollees in a group, but place limits on themagnitude of adjustments for health status and claimsexperience.
• Twenty-four percent of small group enrollees had a choice oftwo or more benefit plans. Of workers offered an HSA plan,approximately 40 percent also had a choice of an alternative plan,usually a PPO or HMO/POS plan. Forty-four percent of enrollees insmall groups chose HSA/HDHP plans when offered a choice among theseand other product types.