The increasing number of working uninsured in the city of Philadelphia: An analysis of small business and employee choice

Employment is the primary source of health care coverage in the United States. However, despite record employment levels, the proportion of working age Americans in employment-based health insurance (EBI) plans is less today than it was ten years ago (data collected Spring, 2001) and those that are in plans are more likely to be contributing to the cost of their premiums. It is estimated that of the more than 40 million Americans who have no health insurance, more than two-thirds are employed, and more than half of those are employed by small businesses with 50 or fewer employees.;Philadelphia small businesses were surveyed to determine factors which influenced their decision to offer health insurance to employees. The decision of a small business employer to offer health insurance coverage, and the decision of the employee to accept that coverage are dependent on a complex set of factors. Employers are more likely to offer coverage to attract more highly skilled employees. They are less likely to offer coverage when the costs of providing that benefit are high. Competition for employees is the driving reason for Philadelphia's small businesses to offer health insurance to employees. Barriers to offering health insurance include cost and lack of knowledge concerning health insurance. However, avoidance of offering health insurance, through alternative (spousal) coverage and the deliberate hiring of part-time workers appears to be an operative strategy. The larger the firm, the more likely the firm is to offer health insurance. However, divisions of larger organizations, regardless of their own size, are far more likely to offer health insurance than freestanding businesses.;Woman-owned or directed businesses have a tendency to be more likely to offer health insurance than non-female owned or directed. Industry sector, along with size, also influences the decision. In short, there exists a tension between the desire of businesses to offer health insurance and the cost of that insurance. Many businesses desire to offer health insurance in an effort to develop and or maintain an affiliate relationship with their employees. Cost compromises that desire.