Health Reform and Small Businesses

The Council of Economic Advisers released a report last week that examines the challenges smaller firms face under our current health care system, and the likely impacts of health insurance reform on small businesses and their employees.

Small businesses are a significant source of job growth in the United States – in 2006, firms with fewer than 20 employees accounted for approximately 18 percent of private sector jobs, but nearly 25 percent of employment growth from 1992 to 2005. Unfortunately, small businesses suffer more from our broken health care system than their larger counterparts. A few facts:

– Small businesses can pay up to 18 percent more per worker than large firms for the same health insurance policy.

– Only 49 percent of firms with three to nine workers and 78 percent of firms with 10 to 24 workers offered any type of health insurance to their employees, compared to 99 percent of firms with more than 200 workers.

– From 2002 to 2008, the percentage of firms with three to nine employees that offer health insurance to their workers declined from 58 to 49 percent.

President Obama talked about the impact of reform on small businesses this week -- watch it below. We also did a post on the topic earlier this month.