How Health Coverage Differs Between Small Firms and Large Firms


How Health Coverage Differs Between Small and Large Firms

Small and large employers vary substantially in health insurance offer rates and costs, according to a study by the Kaiser Family Foundation. Small employers are less likely to offer coverage. Also, workers at small firms have higher cost sharing. (The study defines small employers as those with three to 199 workers and large employers as those with 200 or more.)

The smallest employers (three to nine workers) are less than half as likely as are large employers to offer health coverage. While family premiums are less expensive at small firms, covered workers face higher premium contributions and higher higher deductibles. The study reveals the following:

Offer Rates
  • 56% of small employers offer health insurance to at least some employees, compared to 98% of large employers.
  • 47% of very small employers (three to nine workers) offer health insurance.
  • 41% of small employers did not offer coverage because of the cost of health insurance.
  • 18% of small employers offer health benefits to part-time workers compared to 35% of  large employers.
  • 3% of small employers offer health benefits to temporary workers compared to 11% of large employers.
Waiting Periods
  • 81% of covered workers at small firms have a waiting period to get benefits compared to 71% of workers at large firms. The average waiting period is 2.2 months at small firms and 1.8 months at large firms.
  • In the West, average premiums for single and family coverage are lower for workers at small firms than at large firms.
  • Workers for small firms have average annual premiums for family coverage of $17,938 compared to $16,625 for workers at large firms.
  • Since 2010, average family premiums have grown 25% for small employers and 28% for large employers. Dating back to 2000, family premiums have grown 155% for small employers and 180% for large employers.
Premium Contributions
  • Workers for small firms contribute an average of $899 to their premiums for single coverage compared to $1,146 for workers at large firms.
  • Workers at small firms contribute an average of $5,904 for family coverage compared to an average of $4,549 for workers at large firms.
  • Thirty-two percent of workers at small firms contribute more than half of the premium for family coverage compared to just 8% of workers at large firms.
  • Workers’ contributions to family premiums at small employers have increased 27% since 2010 and 204% since 2000.
  • 34% of small employers contribute more for workers enrolled in family coverage than in single coverage compared to 67% of large employers.
Plan Types
  • 19% of workers in small firms enroll in a point-of-service (POS) plan compared to 6% of workers at large firms.
  • 41% of workers in small firms are in a PPO compared to 56% of workers in large firms.
  • 63% of workers for small firms with single coverage have a deductible of $1,000 or more compared to 39% of workers at large firms.
  • 36% of workers at small firms with single coverage have a deductible of $2,000 or more compared to 12% of workers in large firms.
  • Workers with single coverage at small firms have annual deductibles averaging $700 more than those in large firms. The average difference between small and large employers is more than $1,400 for those with family coverage.
  • The average general annual deductible for single coverage for all covered workers at small firms is $1,507 (up 51% from 2010) and $890 for all covered workers at large firms (up 95% from 2010).
  • Many small employers outsource the administrative functions of their health programs. Some employers provide health benefits by entering into a co-employment relationship with a professional-employer organization (PEO). The employer manages the employees, but the PEO hires employees and acts as the employer for insurance, benefits, and other administrative purposes. Five percent of employers with three to 499 workers with health benefits offer coverage with a PEO.
  • 6% of covered workers with health benefits at firms with three to 499 workers are enrolled in a plan offered through a PEO.
Self-Funded Plans
  • 83% of covered workers at large firms are  in a self-funded plan compared to 17% at small firms. The percentage of covered workers at small employers enrolled in a self-funded health plan is unchanged from 1999.

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Consumers Not Prepared to Be CEO of Their Health

As consumers assume a larger share of healthcare costs and responsibility, a survey by Accolade reveals where they are having difficulty. The survey reveals the following:

  • 32% of insured Americans are uncomfortable with their personal knowledge and skills navigating their medical benefits and the healthcare system. This is higher than the percentage of those uncomfortable buying a home (25%) and is twice as high as those indicating they were uncomfortable purchasing a car (15%) or technology/electronics (16%).
  • Consumers say that dealing with certain healthcare-related activities is a hassle. The top concerns include coordinating all aspects of benefits and healthcare (cited by 55%), selecting and understanding benefits (50%), coordinating care across different doctors, specialists and facilities (41%); and using employer-sponsored benefits programs (30%).
  • Consumers cited finances (31%), emotions (26%) and competing responsibilities (19%) as the top life circumstances that have contributed to poor healthcare decision-making.
  • 80% of respondents would find it valuable to have a single trusted person/resource to help with all of their healthcare needs, such as selecting and using benefits, understanding treatment options, finding providers and coordinating care.
  • When asked what would most contribute to improving their experience as a healthcare consumer, Americans rank having a single person they trust to help with all of their healthcare needs highest at 47%. Ranking lower were having more programs to help them manage their health, such as wellness tools and condition management programs (24%); having more resources from their employer to answer benefit questions (20%); and having more digital/mobile apps to help them make healthcare decisions on their own (13%).
  • While 86% of respondents say that their employer or insurer offers health-related programs, such as wellness apps, condition management programs, provider cost transparency tools and second opinion services, 43% haven’t used them in the past 12 months. They don’t use these programs more often because the programs are not relevant to them (29%), they don’t remember what’s available (15%), they find them confusing (14%), or they don’t like repeating the same information to different programs (13%).


Analysis Underscores the Need for ‘Any Willing Pharmacy’ Policy in Part D

National Community Pharmacists Association (NCPA) CEO B. Douglas Hoey, RPh, MBA issued the following statement in response to the detailed preferred pharmacy access analysis released by the Centers for Medicare & Medicaid Services (CMS) and conducted in response to concerns raised by NCPA, beneficiary advocates and others:

We appreciate Medicare officials acting on the concerns that NCPA members, beneficiaries, patient advocacy organizations and members of Congress have raised. We are still reviewing the full CMS analysis. Our initial reaction is that more work must be done in this area. The CMS analysis documents progress yet still identifies many plans that are ‘access outliers’ that impact a significant number of beneficiaries. Indeed, this total could be higher because CMS excluded from this analysis plans granted waivers to the retail pharmacy convenient access standard requirement. The marketing disclaimers, while appreciated, come well after the 2016 enrollment period concluded and six weeks into the plan year.

In addition, the format in which this data has been posted should be more accessible to the average Medicare beneficiary or their caregiver. Information of this importance should be incorporated into Medicare Plan Finder prominently – and before beneficiaries research their enrollment decisions.

Beneficiaries need swifter relief and protection. To that end, we encourage Medicare officials to implement an ‘any willing pharmacy’ policy and Congress to enact H.R. 793 / S. 1190. This would allow beneficiaries in medically under-served areas to access their prescription drugs at a community pharmacy that accepts the drug plan’s terms and conditions and can serve those patients. Medicare officials have already acknowledged that this is ‘the best way to encourage price competition and lower costs in the Part D program.

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The Insurance Industry Charitable Foundation (IICF) is holding its Women in Insurance Conference June 23 in Los Angeles. For more information, visit

California Investigates Zenefits’ Business Practices

The California Department of Insurance opened an investigation into Zenefits’ business practices and compliance with California law and regulations last year. This week Zenefits announced the resignation of its founder and CEO, Parker Conrad. Insurance Commissioner Dave Jones said, “The recent resignation of Zenefits’ CEO Parker Conrad is an important development, but it does not resolve our ongoing investigation of Zenefits’ business practices and their compliance with California law and regulations. I have directed the Department of Insurance’s Enforcement Branch to deploy additional investigative resources to the Zenefits investigation.”

“Businesses deploying new technologies and new business models must comply with…laws and regulations governing the licensing and training of insurance agents and brokers, which are designed to make sure that only individuals and employers with the expertise and integrity to transact insurance are allowed to do so,” he added Until the investigation is completed, the Department of Insurance cannot release information about its findings and conclusions.

Mid-Sized Retirement & Healthcare Plan Management Conference

University Conference Services is sponsoring the Mid-Sized Retirement & Healthcare Plan Management Conference in San Francisco March 20 to 23. For more information, visit



Workplace Wellness: One Size Fits Few

An International Foundation study uncovered insights from successful wellness programs. The study looked at return-on-investment and value-of-investment (VOI). With ROI, employers use financial measures, such as health care cost savings, to justify their investment in wellness programs. With VOI, employers also include factors like employee morale, workplace productivity, employee absence, and workplace safety. The study reveals the following hints from successful programs:

  • Employers with a positive wellness ROI are slightly more likely to offer wellness plans to control health costs.
  • Employers with positive wellness ROI and VOI are more likely to have been offering wellness initiatives for longer than average time and have budgets dedicated to wellness. VOI results may be noticeable more quickly after implementation.
  • Less-tenured programs have higher participation rates in some initiatives, suggesting that it may be a good idea to keep programs fresh.
  • Employers with positive wellness ROI provide more screening, treatment, fitness and nutrition initiatives. On the other hand, employers with great workplace cultures tend to provide more total well-being initiatives. Employers with positive wellness VOI tend to provide more of all types of initiatives.
  • Employers with positive wellness ROI and VOI are more likely to have prepared general pictures of their health plan status, offer incentives and insurance-based incentive programs, and target programs and communication based on worker health risks.

Top 20 Employee Benefits & Perks

A surveys reveals that 57% of people say benefits and perks are among their top considerations when accepting a job. Four in five would prefer new perks over a pay raise. The following are the top five benefits that matter most to employees:

  1. Healthcare insurance (medical, dental): 40%
  2. Vacation/Paid time off: 37%
  3. Performance bonus: 35%
  4. Paid sick days: 32%
  5. 401(k) plan, retirement plan and/or pension: 31%

The following 20 companies provide perks and benefits that go beyond the basics:

  • Netflix offers one paid year of maternity and paternity leave to new parents. Parents can return part-time or full-time and take time off as needed throughout the year. Overall Benefits Rating: 3.7 out of five.
  • REI offers two paid days off, called “Yay Days,” a year for employees to enjoy their favorite outside activity. Overall Benefits Rating: 4
  • Salesforce offers employees six days of paid volunteer time off a year. If they use all six, they get a $1,000 grant to donate to a charity of their choice. Overall Benefits Rating: 4.5
  • Spotify provides six months of paid parental leave, plus one month of flexible work options for parents returning to the office. The company also covers costs for egg freezing and fertility assistance. Overall Benefits Rating: 4.2.
  • World Wildlife Fund employees take Friday off every other week. Overall Benefits Rating: 4.5.
  • Airbnb, the Best Place to Work in 2016, gives its employees an annual stipend of $2,000 to travel and stay in an Airbnb listing anywhere in the world. Overall Benefits Rating: 4.6
  • PwC offers its employees $1,200 per year for student loan debt reimbursement. Overall Benefits Rating: 4
  • Pinterest provides four months of paid of paid time off for parental leave, plus an additional month of part-time hours, and two counseling sessions to create a plan to re-enter the workplace. Overall Benefits Rating: 4.7.
  • Burton employees get season ski passes and snow days to hit the slopes after a big snowfall. Overall Benefits Rating: 4
  • Twilio offers employees a Kindle plus $30 a month to purchase books. Overall Benefits Rating: 4
  • Twitter is well-known for providing perks such as three catered meals a day, but some lesser-known benefits include on-site acupuncture and improv classes. Overall Benefits Rating: 4.3
  • Accenture covers gender reassignment for their employees as part of its commitment to LGBTQ rights and diversity. Overall Benefits Rating: 4
  • Walt Disney Company offers free admission to its parks for employees, plus their friends and family, and discounts on hotels and merchandise. Overall Benefits Rating: 4.
  • Facebook provides $4,000 in “baby cash” to employees with a newborn. Overall Benefits Rating: 4.7.
  • Evernote hosts classes through Evernote Academy, which offers team-building courses like macaroon baking. Overall Benefits Rating: 4.3.
  • Epic Systems offers employees a paid four-week sabbatical to pursue their creative talents after five years at the company. Overall Benefits Rating: 4.3
  • Adobe shuts down the entire company for one week in December and one week over the summer. Overall Benefits Rating: 4.6.
  • Asana employees have access to executive and life coaching services outside of the company. Overall Benefits Rating: 4.9.
  • Zillow pays for nursing mothers to ship their breast milk when traveling. Overall Benefits Rating: 4.5.
  • Google provides the surviving spouse or partner of a deceased employee 50% of their salary for the next 10 years. Overall Benefits Rating: 4.6

While benefits and perks are a great way to get employees in the door and interested in a company, they’re not among the leading factors that keep employees satisfied on the job and with a company long-term. According to Glassdoor Economic Research, culture and values, career opportunities, and senior leadership are most important in cultivating employee satisfaction.

Financial Stress Affects a  Majority of Employees

Financial stress affects 75% of employees, according to a study by GuideSpark. Employees surveyed said that the following areas give them the most financial stress:

  • 69% Saving enough to meet retirement goal.
  • 68% Having enough cash savings to cover the employee and their family if one loses their job.
  • 63% Being financially prepared for expected life changing events (i.e. marriage, new child, job change.

The study also reveals the following:

  • 81% employees are less likely to leave a company that helps them improve their financial standing.
  • 87% of Millennials expect employers to help them prepare for their financial future.
  • 78% of employees would chose to join a company that offers financial health benefits over one that doesn’t.
  • 81% of employees are less likely to leave a company helps them improve their financial standing.

Employees say these are the top benefits of a financial wellness program:

  • 81% Reduce financial stress
  • 76% Appreciate their company more
  • 65% Lower their healthcare costs
  • 62% Improve their physical health
  • 56% Enable them to focus more on their jobs

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A Campaign to Advance Technology Adoption Among Agents

The Agents’ Council for Technology (ACT) and the ACORD-User Groups Information Exchange (AUGIE) launched the Insurance Digital Revolution (IDR). The objective is to drive adoption of digital tools that help agents, carriers, and general agencies better serve their clients. The program will build awareness of digital capabilities, educate about solutions and provide a platform for sharing success stories.

Ron Berg, ACT executive director said, “Thanks to smart phones and other personal technology, almost everyone can get anything anytime, anywhere. Insurance is no exception. The Insurance Digital Revolution campaign is designed to make sure the insurance industry is ready to meet that expectation.”

The Insurance Digital Revolution follows ACT and AUGIE’s Real Time/Download campaign, which promoted the use of real time and download to allow a single workflow for insurance servicing and quoting. The Insurance Digital Revolution will spotlight technologies including real time and download interface applications, e-docs, single sign on, and other capabilities. For more information, visit


401(k) Mobile App

MassMutual’s “RetireSmartmobile” app now now allows retirement savers to use their smart phones to change how much they contribute to their 401(k) or other defined contribution retirement plan during each pay period. The app is available free for Apple and Android smart phones through the Apple App Store and Google Play app store. 


Guardian Insurance & Annuity Company is introducing a managed account qualified default investment alternative (QDIA) option for small plan participants through Brinker Capital, an independent investment advisor. Brinker Capital is a collective investment trust solution featuring five professionally managed risk-based portfolios, offering investment strategies ranging from conservative to aggressive that offer a blend of mutual funds and exchange-traded funds. Each portfolio uses a multi-asset class approach and targets a specific investment objective. For more information, visit

Business Travel Assistance App

AIG’s Business Travel Assistance mobile app is now available for U.S.-based users who have coverage under AIG’s group travel accident insurance policies. The secure, members-only assistance app, available for iOS and Android, provides convenient access to in-depth travel, security, and health information. AIG’s group travel accident insurance policies are made available through its Group Benefits unit to sponsoring organizations including companies, schools, and nonprofit groups. For more information, visit