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U.S. employers with 10 to 99 employees were more likely to offer group health coverage in 2016, but U.S. employers with fewer than 10 employers continued to drop health benefits.

Paul Fronstin, an anlayst at the Employee Benefit Research Institute, reported data supporting that conclusion in a new group health market review based on government survey data.

The percentage of micro employers that offered health benefits dropped to 21.7% in 2016. That was down from 22.7% in 2015, and down from 35.6% in 2008.

(Related: Small Employers Are Dropping Health Plans, EBRI Says

Here’s how coverage offer rates changed for employers in some other size categories:


10-24 employees

2017: 49.4%

2016: 48.9%

2008: 66.1%

25-99 employees

2017: 74.6%

2016: 73.5%

2008: 81.3%

100-999 employees

2017: 96.3%

2016: 95.1%

2008: 95.4%


Reasons

Fronstin did not discuss the reasons for the continuing decline in the micro-employer health coverage offer rate.

He suggested that the coverage offer rate might be increasing for larger employers partly because health coverage cost increases have slowed, and partly because the unemployment rate has dropped.

“When unemployment is low, recruiting and retaining workers becomes a bigger challenge for employers, including some smaller employers, which in turn often means improving compensation and benefits,” Fronstin wrote.

In the past, however, many small employers have denied seeing much of a connection between offering health benefits and business performance. In 2003, for example, EBRI polled small employers. Fewer than one-third of the participating employers agreed  that offering health benefits would have a helpful effect on employee recruitment, employee retention, employee attitude, employee health or absenteeism, according to Fronstin.

A full copy of the EBRI report is available here.

—Read EBRI Posts 2015 Health Savings Account Data on ThinkAdvisor.


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