The Kaiser Family Foundation released their annual study of employer-sponsored health insurance, and the news for small businesses isn’t good. Costs are continuing to go up while the number of companies offering insurance to their employees is not. Across the board, premiums for family coverage rose only 4% over the last year; however, for small businesses (less than 200 employees) that number is nearly double. For individual coverage, small business premiums increased 5%, higher than the average increase among all employers.
The study noted that small businesses are migrating to the cheapest plans—leaving employees strapped with high deductibles. Since 2006, the number of small businesses acquiring high-deductible, cheap plans for their employees has grown to nearly a quarter of all small-business insurance plans.
In addition to premiums rising, deductibles also continue to increase. Nearly half of all covered small business employees with individual plans have a deductible over $1,000 (with more than one quarter paying more than $2,000).
Keep in mind, the major changes come in 2014 when many of the most important provisions of the Affordable Care Act take effect, that is if the law is not repealed before then. For example, beginning Jan. 1, 2014, the Small Business Health Insurance Tax Credit increases to 50% of the employer’s contribution to provide health insurance for its employees.
To learn how you can save money but continue to operate your small business, check out our prior blog posts on simple tax tips for small businesses and our guide to building a sustainable (but lean) start-up.
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