(Augusta, ME) The Maine Center for Economic Policy (MECEP) released today the findings from a 2004 survey of Maine small businesses, co-authored by Lisa Pohlmann and Frank O’Hara.
The survey of Maine small businesses with 2-49 employees conducted in August 2004 showed that 53% of small businesses were offering any employee health coverage in 2004, with 8% having dropped coverage between 2002-2004.
In response to rising premium costs, firms had shifted more of their health care costs onto their employees in the form of higher deductibles and co-pays. Small businesses that offered health insurance paid an average of 84% of the premium for their employees, with one out of three paying 60% or less. On average these firms paid less than half of the premium for their employees’ families. A worker who wants family insurance has an average monthly premium cost of over $400 a month. One out of four small businesses delayed wage increases to their employees to pay for health insurance at their last insurance renewal.
Comparing these results to a survey conducted in 1999 by MECEP, the smallest businesses (2-10 employees) had a significant decline in rate of coverage between 1999-2004, from 62%-43%. This follows national trends.
Low-income workers were less likely to be offered health insurance in small firms. Over 4 in 5 workers with an annual income over $20,000 are offered health benefits in the respondent small businesses; but only 1 in 4 full-time workers earning under $13,000 are offered health benefits.
Small businesses want to provide health benefits as a matter of principle (85%), and in order to attract and retain employees (76%). Yet the cost of health care was a moderate to major concern for 95% of the respondents. One out of three small businesses said they would cut back further on coverage with an insurance rate increase of up to 10%.
“The health care crisis in this country has hit small businesses very hard,” said Lisa Pohlmann, MECEP associate director and co-author. “Maine is a small business state and we must continue to work on policy solutions to help ensure their employees have health coverage. This is important to the entire state economy.”
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