NCPA - National Center for Policy Analysis


October 2, 2006

Health insurance coverage for small employers is more affordable than is widely known, a new survey released by America's Health Insurance Plans (AHIP) found.

The survey of AHIP member companies offering coverage in the small-group health insurance market includes premium and benefit data from more than 650,000 small groups (those with 50 or fewer employees), covering 4.0 million workers and 3.2 million dependents.

Key survey findings include:

  • Small group premiums in 2006 were slightly lower than those reported in the 2005 Kaiser Family Foundation (KFF) survey of (mostly) larger employers, despite an additional year's increase in health costs; premiums in the KFF survey for all firms with three or more employees averaged $335 per month ($4,024 annually) for single coverage, and $907 per month ($10,880 per year) for family coverage in 2005.
  • In 2006, the average premium for small group health insurance was $311 per month ($3,730 per year) for single coverage and $814 per month ($9,770 annually) for family coverage.
  • In terms of benefit design, most small business employees are covered by PPO and HMO products, while HSA-eligible health plans are quickly establishing a presence in the small group market.


  • Among small group enrollees, 57 percent had PPO coverage in 2006, with both in-network and out-of network benefits.
  • Nearly 40 percent had HMO coverage, often with a point-of service (POS) option.
  • Approximately 4 percent of enrollees had a health savings account (HSA) benefit, with a qualifying high deductible health plan (HDHP).

Source: "Small Businesses Have Affordable Health Insurance Options, New Survey Finds," America's Health Insurance Plans, September 25, 2006.


Browse more articles on Health Issues