Large employers continue to believe in the value of sponsoredhealth benefits for employees, despite the options available tothem under the Affordable Care Act. But smallemployers are increasingly choosing to pull out of the healthbenefits business.

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That’s what a survey from the Employee Benefits Research Institute(EBRI) found when it examined the percentage of employers offering healthinsurance from 2008 to 2015. Using data from theMedical Expenditure Panel Survey — Insurance Component, EBRIreported that nearly 100 percent of the largest employers (thosewith 1,000 or more employees) have continued to offer healthinsurance through the ups and downs and gyrations of the past sevenyears.

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Even the next level of employers, those with between 100 and 999workers, have been steady in their insurance plans, with between92 percent and 95 percent offering coverage.

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But a very different picture emerges from the data as companiesget smaller. The percent of employers with fewer than 10 employeesoffering health insurance fell from 36 percent in 2008 to 23percent in 2015. In the 10 to 24 employee ranges, plans fell from66 percent of employers to 49 percent. And for those employers justbelow the “large company” cutoff of 100 employees, the percentdropped from 81 percent to 74 percent.

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While major employers tended to offer coverage throughout therecession and still offer it now, the recession rather than theenactment of health care reform spelled the end of employer plansfor many small businesses.

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The data reveals a downward trend beginning in 2009 and, withthe exception of a slight bump in 2013, all small employercategories have followed a pattern of offloading health insurancefor employees.

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In the full report, EBRI’s Paul Fronstinnotes that multiple factors are doubtless behind the decline ininsurance coverage offered by smaller employers. He cites risinghealth care costs in general; a desire to better manage health carecosts going forward; the availability of plan options under healthcare reform; and the lasting effects of the recession.

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“Historically, smaller employers have been less committed tosponsoring health coverage than larger employers. One often-citedreason is that smaller firms, more than larger ones, frequentlyface higher and more volatile increases in health insurancepremiums,”Fronstin says.

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He also speculates that forces could align to reduce thepercentage of large employers that sponsor plans, but that so far,the benefits in terms of recruiting and retention have outweighedthe savings possible by no longer offering health insurance toworkers.

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Dan Cook

Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.