Healthcare Benefits Too Expensive for Many Employers

photo credit: Brooks Elliott

Getting more employers to provide healthcare benefits for their workers isn’t simply a matter of making health coverage cheaper.

A recent report from consulting group Mercer has found that most employers who don’t offer health benefits to employees say that they could not – or would not – pay more than $50 per month per employee to cover healthcare insurance.

Much of the national health reform debate is centered on the question of how to encourage more employers to provide their workers with healthcare benefits. An additional question is whether this should be done at all.

How Many Employers Provide Healthcare to Employees?

More than a third of businesses don’t provide healthcare benefits from their employers, and most of these are smaller businesses. However, Mercer’s recent survey of 545 employers that don’t offer healthcare benefits found that a third of them were either unable or unwilling to pay anything at all. Of those surveyed, 26% said they’d be willing to contribute up to $50 a month for each employee.

According to Mercer representative Linda Havlin, the findings demonstrate just how difficult it would be to encourage small business owners to provide healthcare benefits for employees. In addition, Havlin says, it explains why high-deductible health plans, despite their lower cost, haven’t been popular with small businesses.

The Mercer group also surveyed almost 2,900 employers which do offer employee healthcare benefits. The survey found that 53% of those companies would support a requirement for employees to have healthcare if they could afford it, whether provided by the employer or purchased independently.

Healthcare & Presidential Preferences among Employers

Interestingly enough, the vote was split on preferences for running candidate’s healthcare reform plans. Around half of those surveyed disapproved of the “play or pay” laws, similar to Senator Barack Obama’s proposal, which would require large employers to either offer employee benefits or contribute to a fund for the uninsured. And the reception was about the same for Senator John McCain’s proposal to either cap or remove the tax exclusion for employee healthcare plans.

So what’s the real message here? In some respects, employer sponsored healthcare doesn’t work. Would the U.S. healthcare system be more effective – and less expensive – if healthcare insurance wasn’t tied to your place of employment?

Or would the lack of employer-sponsored insurance simply make it harder for low-income wage earners to get insurance?

This entry was posted on Tuesday, October 28th, 2008 at 7:59 pm and is filed under Group Health Plans, Health Care Costs. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.