If You Have the Choice Between Small Business and Individual Health Insurance, Which is Better?

Today eHealth, Inc. (NASDAQ: EHTH) (eHealth.com) released a report on 2018 small business health insurance costs and trends among groups with fewer than 30 employees, along with results of a survey of small business owners who purchased group health insurance through eHealth.

Highlights from the report include:

• Small business coverage offers lower per-person health insurance costs than individual market coverage: Average per-person monthly premiums under a small business health plan were 7 percent lower than those for unsubsidized consumers who bought a health plan on their own at eHealth in 2018 ($409 vs. $440, respectively). Annual deductibles were 31 percent lower ($3,140 vs. $4,578); people covered under small business plans were also more likely to have a Silver or Gold-level plan (78 percent vs. 42 percent of individual buyers).
  
  
• Small business health insurance costs are more stable than the individual market: While the average per-person premium for small business coverage increased by 5 percent between 2015 and 2018, average premiums for unsubsidized individuals who bought their own coverage at eHealth during the same period saw an increase of 58 percent (from $286 in 2015 to $440 in 2018). 
  
  
• Average premiums were down in 2018, but deductibles increased: The average per-person premium for small business health insurance plans decreased 2 percent between 2017 ($416)and 2018 ($409). The average individual deductible for small business plans increased 14 percent in the same period (from $2,754 to $3,140).
  
  
• Strategic considerations often drive adoption of small business coverage: 66 percent of small business owners say that offering coverage helps them hire and retain the best workers; only 4 percent say the repeal of the ACA tax penalty will encourage them to cease offering employer-sponsored coverage.
  
  
• Small premium increases could blunt offers of employee health benefits: 83 percent express concern about future cost increases, with 63 percent of small business owners saying an increase of 15 percent or less in monthly premiums would make their current plan unaffordable.