Tennessee Small Business Coalition: Research

Tennessee's Small Businesses Weigh In:

• Nearly Half of Tennessee Small Businesses Do Not Offer Health Insurance to Workers
• 3 in 4 Small Businesses Say It’s Too Expensive

New Report: Tennessee’s Small Businesses and Factors Influencing Health Insurance. Click here.

Nashville, TN (Dec. 16, 2009)—A new report from Vanderbilt University’s Center for Community Studies and Tennessee Small Business Coalition reveals that small businesses around the state are struggling to provide health insurance to employees, with nearly half not providing any type of medical benefits. The main reason for not offering coverage is that it is simply too expensive.

“With small businesses being the backbone of our economy, but those whose employees are at most risk of not having health care coverage, it is critical that we better understand their experiences and the barriers to coverage,” said Craig Anne Heflinger, professor of human and organizational development in Peabody College and affiliated faculty member in the Vanderbilt Center for Community Studies.

Nine in ten small businesses report increases in the company’s total health care coverage costs from last year, with 3 in 4 reporting increases of 5 percent or higher and more than 1 in 4 reporting increases of more than 15 percent.

The costs to workers receiving employer sponsored insurance also increased. More than 3 in 5 employers report paying 15 percent or less toward the cost of employee coverage. Many have switched to plans that reduce their cost burden by passing along costs to workers, with 1 in 3 employers switching to plans with higher out-of-pocket costs and nearly 1 in 2 switching to plans with higher deductibles.

“Affordability remains the top concern of both small business owners and workers,” said Tony Garr, Executive Director of the Tennessee Health Care Campaign. “This is why we are excited that Congress is close to passing a health care reform bill that, among other things, will make coverage more affordable by providing tax credits to small businesses and premium subsidies to employees, and will place caps on out-of-pocket costs.”

The study found that the smaller the small business, both in terms of workforce and gross revenues, the more likely it would not offer health insurance benefits. Other leading characteristics among small businesses not providing benefits as compared to small businesses that do include: lower annual salaries for full-time employees; higher proportion of part-time workers; higher proportion of female workers; and more likely to be female owned.

This survey of Tennessee small businesses is the second of two conducted this year by researchers at Vanderbilt University’s Center for Community Studies and the Tennessee Small Business Coalition. Click here for the report. For the Center for Community Studies at Vanderbilt, Click here.

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Previous Report from Survey: On July 7, 2009 a scientific survey report conducted by Vanderbilt University, Peabody College Center for Community Studies and the Tennessee Small Business Coalition was published and shows that Tennessee's small businesses support health care reform and are struggling with costs.

The Report - American Health Care Reform: Serious Business for Tennessee's Small Businesses - illustrates small business owners' concerns and preferences for reform.

Key finding from the report include:

• 79% report they are "really struggling" to afford the cost of health coverage
• 61% believe that reforming heath care now is a step to getting the economy back on track
• 73% report everyone should have a choice between quality, affordable public and private plans
• 88% report that it will be a significant challenge in the future to offer health insurance coverage to employees
• 70% want more public oversight of private insurers
• 61% agree the government should play a stronger role in guaranteeing access to quality, affordable health care

For a copy of the report, click here.

Small Business Initiative: In 2010, THCC was one of eighteen states in the Consumer Voices for Coverage project, a joint initiative of Community Catalyst and the Robert Wood Johnson Foundation (RWJF). The general focus of the project in all state is to help ensure that consumer concerns are represented in both state and national health care reform. THCC believes that small business owners are a segment of this group who have not been heard from enough. So, our project is about engaging small business owners.

State Guide - This guide gives one a comprehensive picture of the Affordable Care Act.

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