More than half of all small businesses reported they were contemplating changes in their healthcare programs In Small Business Digest's May survey. Among the key preliminary findings from the first 1,000 respondents: - 21% said employees would be responsible for more of the their healthcare costs.
- 52% were making changes in their healthcare plan.
- 10% were reducing their contributions to the healthcare plan.
- 3% were increasing their contributions to the healthcare plan.
- 17% intended to change providers.
By a wide margin (67%), employers also said that healthcare costs were important, or very important, to employees. Not surprisingly given this finding, the survey indicated 31% of respondents pay all employees' healthcare costs and another 38% pay more than 50% of those expenses. On the other hand, 14.7% pay no expenses and 15% pay less than 50%. Employees Involved In Healthcare Decisions While almost 75% said they relied on an insurance broker in choosing healthcare programs, other key decision makers were also identified: trusted employees (17%), other staff (17%), and the CFO (26%). Executives from other companies were also consulted by 17% of respondents. The study confirms a trend first reported last year indicating that employees would have a greater role in choosing and paying for healthcare costs. As the economy gears up for new growth, this trend will clash with the needs of small businesses to hire and pay for employees. Almost five percent of respondents said they would institute two-tier healthcare programs for new hires. Recent Trends Focus On Cost Containment In recent years, respondents reported: - 26% were switching more costs to employees.
- 36% were reducing costs by curtailing benefits.
- 26% were experiencing resistance from employees to healthcare changes.
- 70% were experiencing double-digit rate increases (almost all who paid for healthcare costs).
Also of significance, 971 respondents listed the following as most important to efficient use of the healthcare plan. Type of medical coverage available | | 29.90% | Choice of medical coverage available | | 24.40% | Amount of employee contributions | | 33.00% | Co-pay provisions | | | 50.90% | Deductibility level | | | 34.40% | Choice of providers | | | 35.30% | Procedures and drugs coverage | | 33.90% | Online interface with plan provider | | 2.70% | Understanding healthcare plan provisions | 29.90% | Perceived plan applicability to individual employee | 14.70% | | |
Seeming to support the trend for change by small firms, respondents reported significant shifts in their choice of healthcare options. Many were contemplating programs that require employees to provide more input in making choices and funding. Current Healthcare Offerings | 971 | HMOs | 30.30% | PPOs | 49.20% | Full coverage | 25.90% | Partial coverage with high-deductible | 7.20% | Medical Savings Plan | 3.50% | Government-sponsored option | 1.30% | Flexible Savings Accounts | 11.60% | Health Savings Accounts | 2.80% | Health Reimbursement Arrangements | 5.50% | | |
Anticipated Healthcare Offerings
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982
| HMOs | 21.60% | PPOs | 25.40% | Full coverage | 11.40% | Partial coverage with high-deductible | 17.10% | Medical Savings Plan | 12.50% | Government-sponsored option | 3.30% | Flexible Savings Accounts | 9.60% | Health Savings Accounts | 20.50% | Health Reimbursement Arrangements | 8.50% |
More results from the survey, which is still being conducted, will appear periodically over the next month.
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