Although nearly all large firms (200 or more workers) offer health benefits, small firms (3-199 workers) are significantly less likely to do so. The percentage of large firms and small firms offering health benefits in 2006 is not significantly different from the percentages in 2005.

Since 2000, the percentage of firms offering health benefits has dropped by eight percentage points. While the year-to-year changes have not been statistically significant, the cumulative effect has been a large and statistically significant change over this six-year period. This change is driven largely by a decrease in the percentage of small firms (3-199 workers) offering coverage.

About half of firms offering health benefits offer or contribute to a separate dental health benefit; 21% of firms offering health benefits offer or contribute to a separate vision benefit.

• Ninety-eight percent of large firms (200 or more workers) offer health benefits in 2006, unchanged from 2005. In contrast, only 60% of small firms (3-199 workers) offer health benefits in 2006. This is similar to the offer rate among all small firms in 2005, but represents a drop in the offer rate for small firms from 68% in 2000 (Exhibit 2.2). Driven largely by this decline among small firms, the offer rate among all firms has dropped from 69% to 61% over the same time period (Exhibit 2.1).
  
• The likelihood that a firm offers health benefits to its workers varies considerably with the firm’s characteristics, such as firm size, whether the firm is higher wage, the proportion of part-time workers in the firm, and whether workers are unionized.
  
• • The smallest firms are least likely to offer health insurance. Only 48% of firms with 3 to 9 workers offer coverage compared to 73% of firms with 10 to 24 workers and 87% of firms with 25 to 49 workers. Over 90% of firms with 50 or more employees offer health insurance coverage (Exhibit 2.2).
    
  • Higher wage firms – where less than 35% of workers earn $20,000 or less annually – are more likely to offer health insurance than lower wage firms – where 35% or more of workers earn $20,000 or less annually. Sixty-five percent of higher wage firms offer health benefits, compared to 42% of lower wage firms (Exhibit 2.3).
    
  • Firms with fewer part-time workers – where less than 35% of employees work part-time – are also more likely to offer coverage to their workers than firms with many part-time workers. Among firms with fewer part-time workers, 67% offer health insurance, compared to 44% of firms with a higher percentage of part-time workers (Exhibit 2.3).
    
  • Firms that employ at least some union workers are much more likely than firms without union workers to offer health benefits to their employees. Eighty-seven percent of firms with union workers offer health benefits, whereas 60% of firms that do not have union employees offer health coverage (Exhibit 2.3).
    
• Among firms offering health benefits, relatively few offer benefits to their part-time and temporary workers.
  
• • In 2006, 31% of all firms that offer health benefits offer them to part-time workers. Firms with 200 or more workers are more likely to offer health benefits to part-time employees than small firms (3-199 workers) (Exhibit 2.4).
    
  • A very small percentage of firms (3%) offering health benefits offer them to temporary workers (Exhibit 2.5).

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Dental and Vision Benefits

• About 50% of firms offering health benefits offer or contribute to a dental insurance benefit for their employees, separate from any dental coverage the health plans might include. This is a significant increase from 39% in 2003, which is the last time the survey asked about dental benefits. Large firms (200 or more workers) are far more likely than small firms (3-199 workers) to offer a dental health benefit, at 80% versus 49% (Exhibit 2.6).
  
• Just 21% of firms offer or contribute to a vision benefit for their employees, separate from any vision coverage the health plan might include. Large firms (200 or more workers) are more likely than small firms (3-199 workers) to be offered a vision care benefit, at 44% versus 20% (Exhibit 2.6).

Firms Not Offering Health Benefits

• Despite a slowing of health insurance cost growth in recent years, the cost of health insurance remains the main reason cited by firms for not offering health benefits.
• • Among firms not offering health benefits, 74% cite high premiums as a “very important” reason for not doing so. Other factors frequently cited by firms as “very important” reasons for not offering coverage include: firm is too small (57%) and employees are covered elsewhere (34%) (Exhibit 2.7).

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For more information regarding survey methodology, click here to view the Survey Design and Methods section.

For more information regarding survey methodology, click here to view the Survey Design and Methods section.

For more information regarding survey methodology, click here to view the Survey Design and Methods section.