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Small Business Employee Benefits and HR Blog

Small Business Health Insurance Costs Nearly Doubled Since 2009 - Survey

Small business health insurance costs have nearly doubled since 2009, with 91% of small businesses reporting increases in their health plan at their most recent health insurance renewal. To deal with these rising costs, 34% of small businesses report holding off on hiring a new employee while 12% report they had to lay off an employee.

These are some of the key findings of the National Small Business Association's (NSBA's) 2014 Small Business Health Care Survey, released February 6, 2014.

The small business health insurance survey was conducted online November 20 to December 4, 2013 among ~780 small business owners across the U.S. Of those surveyed, 82% had 1-49 employees, 5% had no employees, and 12% had 50 to 499 employees.

Here are key findings from NSBA's 2014 Small Business Health Care Survey.

Small Businesses Want to Offer Health Benefits, But Cost and Administration Time are Big Challenges

The majority of small businesses (67%) think offering health benefits is very important to recruiting and retaining good employees, but just 51% of employers with one to five employees offer health-related benefits.

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According to the survey, cost is the number one driver of whether or not a small business will offer health insurance. Also, the overwhelming majority (72%) of small business owners personally handle health benefits, underscoring the need to simplify administration of health benefits.

Of the small businesses who do not offer health benefits, 11% plan to offer health benefits in the next year, 67% do not, and 22% are not sure.

Small Business Health Insurance Costs Nearly Doubled Since 2009

According to the survey, small businesses report their average monthly per-employee cost of health insurance premiums to be $1,121 (individual), up from $590 per month in 2009.

At the most recent renewal, 91% report increases in their health plan, and the majority (82%) expect to continue seeing cost increases in the coming year. One in four small businesses report insurance cost increases exceeding 20% at their most recent renewal. Over the last five years, 68% report renewal increases exceeding 20%.

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To deal with these rising costs, 34% of small businesses report holding off on hiring a new employee while 12% report they had to lay off an employee. Fifteen percent report they plan to drop coverage in the coming year (2014) - up from just 2% who reported dropping coverage in the last year (2013).

Insurance Brokers Integral to Small Business Health Insurance

Three-fourths of small businesses (76%) report they plan to purchase insurance through their existing broker in the coming year - with less than one-in-ten planning to purchase health insurance through the Small Employer Health Options Program (SHOP Marketplace).

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Click here to read the full survey via NSBA.

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