Group plans for small businesses may offer a lower-cost option in comparison to individual market coverage, according to a new report.
Average monthly premiums in these plans were 7% lower last year than unsubsidized individual market plans, new data (PDF) from eHealth show. Consumers who purchased their own unsubsidized plans paid an average of $440 per month compared to $404 monthly in small business plans.
In addition, deductibles were notably lower, the study found. The average deductible in a small group plan was $3,140, 31% less than the $4,578 average in unsubsidized individual market plans.
Costs were higher in smaller groups enrolled in these plans. For groups with five or fewer employees, average monthly premiums were $419, compared to $364 for groups with between six and 24 employees.
Small businesses rely heavily on options available in the Affordable Care Act exchanges and small group plans, as benefits packages—even slim or costly ones—are crucial to attracting and retaining workers. The study also includes survey responses from nearly 200 small businesses that work with eHealth, and 66% said this was a key reason they offer insurance though it can be financially burdensome; 51% said it was the single most important reason they include health benefits.
Twenty-six percent said they offer small group plans because their employees cannot otherwise afford coverage on their own, and 21% said that if they did not offer a plan themselves, they would assist their staff members in finding coverage elsewhere.
In addition, small businesses are offering notable premium assistance, according to the study, with more than half (51%) saying they cover at least 75% of their employees’ premiums.
However, their outlook is not particularly rosy, according to the report. Most surveyed businesses (83%) were at least somewhat concerned with their ability to offer health coverage in the future, with 41% saying they are very concerned.
Sixty-three percent said that moderate premium increases, 15% or less, would make their current plans unaffordable, according to the survey.
These businesses also flagged out-of-pocket costs for employees as a concern. Thirty-nine percent said this was a significant concern, and 39% also said their staff members had asked for help in paying medical expenses within the last year.