A health insurance crisis may be looming for employees of small businesses, with many firms struggling to cover their share of these costs, new research from Harvard Business School finds.
Nearly one-third of employers surveyed weren’t sure they could pay premiums beyond August 15, 2020, write HBS faculty members Leemore S. Dafny, Zoë B. Cullen, Christopher T. Stanton, and doctoral student [removed] . Their paper was published recently in the [removed] .
“Absent additional relief—and soon—providers and policymakers should expect much greater disruption in insurance coverage going forward,” the authors write.
Small businesses, which account for more than [removed] in the United States, prioritized employee health insurance premiums as the COVID-19 pandemic hit, sometimes even over paying rent, Dafny and colleagues found.
Some 60 percent of small businesses offered health insurance before the pandemic. Through June 15, 95 percent of those continued to do so, according to the researchers.
“Given the dire economic times, one of the first things you’d expect small businesses to do is to slash some employee benefits,” says Dafny, the Bruce V. Rauner Professor of Business Administration. “So I was surprised we only saw a small reduction in the percent offering coverage, from 60 percent to 57 percent.”
Employees' wages come first, then health insurance
Almost half of small business owners surveyed said they considered health insurance premiums their second priority, behind wages.
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