Small Employers and the Health Insurance Market

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Abstract
In 1993 half of all small businesses (fewer than fifty workers) sponsored a health plan for their employees, up from 41 percent in 1989. While not as deep, the benefits offered by small firms are nearly as broad as benefits offered by large firms, and they have expanded since 1989. Small businesses pay more for coverage, however. Although coverage restrictions based on health status and preexisting conditions are a significant concern of small firms, actual limits of this type in the small-group market are modest. Firms not offering insurance report that they have wide access to coverage, and many would sponsor a plan if only prices were lower.