Reporting from Gladstone, Mo.—
Major insurers around the country are reporting that a growing number of small businesses are signing up to give their workers health benefits, a sign of potential progress for the nation's battered healthcare system.
The increase, although not universal, has brought new security to thousands of workers, many of whom did not have insurance or were at risk of losing it.
An important selling point has been a tax credit that the nation's new healthcare law provides to companies with fewer than 25 employees and moderate-to-low pay scales to help offset the cost of providing benefits. The tax credit is one of the first few provisions to kick in; much of the law rolls out over the next few years.
"We certainly did not expect to see this in this economy," said Gary Claxton, who oversees an annual survey of employer health plans for the nonprofit Kaiser Family Foundation. "It's surprising."
For insurers, the market presents a big opportunity. Nationally, three-quarters of businesses with 10 to 24 workers offer benefits. About half of those with three to nine employees provide health plans. By comparison, 99% of firms with more than 200 employees offer benefits.
Now some insurers are reporting significant jumps in coverage.
In the six months after the law was signed in March, UnitedHealth Group Inc., the country's largest insurer, added 75,000 new customers who work for companies with fewer than 50 employees. The Minnesota company called the increase notable but declined to reveal further details.
Coventry Health Care Inc., an insurer in Maryland that focuses on small businesses, signed contracts to cover 115,000 new workers in the first nine months of this year, an 8% jump.
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Nationwide, the Kaiser survey found that 59% of firms with three to nine employees offered health benefits, up from 46% last year.
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