Unexpectedly Intriguing!
August 24, 2010

How do small firms compare with big businesses where health care insurance is concerned?

To find out, we've mined the Kaiser Family Foundation's 2009 Annual Survey of Employer Health Benefits, which breaks the data down by plan type. And since the Kaiser folks didn't present their data graphically within their report, we've gone the extra mile to fill the gap in their coverage to do that for you!

Health Insurance: Single Coverage at Small vs Large Firms
Average Annual Health Insurance Premiums for Single Coverage at Small Firms in 2009 Average Annual Health Insurance Premiums for Single Coverage at Large Firms in 2009

What we find is that on average, the health insurance at large firms for single individuals is more expensive than than typically found at small firms, which we see carries across all types of health plans. Likewise, we see that the portion of premiums paid by workers versus the share of health insurance paid by their employers is also less across the board for all types of plans.

In terms of the types of plans themselves, we find that High Deductible Health Plans with Savings Options (HDHP/SO) is the least expensive regardless of firm size. Interestingly, Health Maintenance Organizations (HMOs) are the second most inexpensive kind of plan for small firms, while these plans are the most expensive for large firms.

The narrowest difference between small and large firms for single coverage are Point of Service (POS) plans, whose total costs are within $29 of one another. Preferred Provider Organizations (PPOs), whose total cost is within $35 of one another. For both types of plans however, we see that employees at small firms are much more likely to have to cover a smaller portion of these plan costs than their peers at large firms.

The average cost of health insurance plan for single coverage in 2009 was $4,824.

Health Insurance: Family Coverage at Small vs Large Firms
Average Annual Health Insurance Premiums for Family Coverage at Small Firms in 2009 Average Annual Health Insurance Premiums for Family Coverage at Large Firms in 2009

We see many of these same patterns repeated for family coverage, although here, we find one major difference: the employees at large firms pay a lot smaller portion of the cost of their health insurance premiums.

The differences can be significant. For example, for HMO plans, we find that while the total premium for a large firm costs $1,638 more than at a small firm, the employee of a small firm pays $1,825 more out of their own pocket to cover their share of that cost. The smallest difference is that for HDHP/SO plans, where a family coverage plan costs $1,626 more at a large firm than at a small one, while a worker at a small firm pays $490 more out of their pocket to cover their share of that plan than a worker does on average at a large firm.

We'll close by observing that the average cost of a health insurance plan for family coverage in 2009 was $13,375.


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