It is no secret that small to medium -sized companies are struggling to handle medical care costs, and a report published last week of the JPMorganhase Institute is adding that evidence.
The report found that approximately one third of small businesses suspended their health insurance coverage from one year to another. For example, 32% or non -employer companies (companies without paid employees, but the health insurance premiums paid in 2018 no longer did it in 2019. Similarly, 31% of the employer companies, those with paid employees,
JPMorgan also analyzed the results after the pandemic from 2022 to 2023. Duration in this period of time, 26% or unused companies suspended the payment of health insurance premiums, together with 27% or employer companies.
It is likely that medical care costs are the main factor that drives the decisions of small businesses to stop paying health insurance premiums.
“In all our data, we have so small companies are administered with limited resources, suggestions that make dark compensation. The increase in medical care costs can have that effect: we saw that companies with the greatest largest funeral fun coverage,” said Chris Wheat, president of JPMorcoranchase Institute, in an email.
The report also showed that most of the small businesses that stopped paying health insurance premiums continued to operate in later years. Among non -employers, 89% continued to operate in the first year after suspending payments. At the end of its fifth year after stopping payments, 70% continued to operate. For employer companies, 93% continued to operate in their first year, and 79% continued in their fifth year.
A separate report by Morgan Health, a business unit by JPMorgan Chase focused on insurance sponsored by the employer, offered qualitative research on how small businesses make medical care decisions. He pointed out that although a third of small businesses arrested the health insurance payments one year old to the next, this is a last resort.
To avoid having to do this, employers will take measures such as limiting hiring or commercial expansion. The report cited a medium -sized commercial leader saying that “there should be many cuts made in our budget, we would do it [discontinue benefits] … I think that would be one of the last things in the cutting block. “
There are new solutions that small businesses can implement to manage medical care costs, but Morgan Health declared a limited bandwidth to complete exploration thesis options. For example, individual coverage health refund agreements (Ichras) are collecting steam, but many employers still do not know this possibility. ICHRA allow employers to provide their employees with dollars before taxes to cover the cost of individual health insurance premiums.
“In particular, [small and mid-sized businesses] Have a higher barrier to integrate innovative solutions compared to larger companies, mainly due to the lack of having a dedicated human resources team to investigate compensation and understand how these models are aligned with their strategy, “Morgan Health.
In addition, Morgan Health discovered that small employers are “frustrated by fragmented, often complex and opaque nature of existing benefits resources.” They want a resource center to improve their knowledge of health benefits and help them make medical care decisions.
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