Small business health insurance

While there has been much discussion of how the Affordable Care Act (ACA) will affect small businesses, there’s been very little focus on how the health reform law will affect the owners of those businesses as people.

The Kaiser Family Foundation’s Employer Health Benefits Survey indicates that most small businesses are much less likely than larger businesses to offer health benefits to their workers. According to the study, half of businesses with 3-9 workers and 73% of firms with 10-24 workers provide health insurance. That compares with 98% of firms with 200 or more workers that offer health coverage.

Workers in organization that do not offer health coverage must rely on employer-based insurance through a family member, buying insurance in the individual market (assuming they can afford the coverage), or in many cases going uninsured.

What about the owners of these small businesses? They’re pretty much in the same boat. The accompany chart shows how small business owners with 1-24 employees now get insurance.

A few striking things emerged from the Kaiser Family Foundation’s analysis:

• About one in four small business owners is uninsured, roughly the same as for non-elderly adults generally.
• Just 40% of small business owners get job-based insurance, either from their own job or through a family member. In contrast, almost six in ten non-elderly adults get their insurance through an employer.
• Small business owners rely heavily on the individual insurance market, with 30% of them buying “other private insurance” (the vast majority of which is coverage purchased in the individual market).

What about you? How do you get insurance today? How will you get insurance for you and your family in the future?

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Citation: Larry Levitt, Anthony Damico and Gary Claxton, “How Small Business Owners Get Health Insurance,” The Henry J. Kaiser Family Foundation, Sep 28, 2012