Small businesses: the health insurance bind

This paper discusses the structural and regulatory barriers that stymie small businesses' efforts to provide health insurance for employees. Specifically, small businesses face lower revenues and higher health insurance costs than large businesses. Furthermore, small businesses cannot gain the administrative, as well as cost, advantages of self-insurance. The two options for pooled insurance-Taft-Hartley groups and Multiple Employer Wellness Arrangements-are increasingly difficult to pursue. Even state-developed "basic insurance" packages have not proven a genuine solution for small businesses. However much we as a nation want to tie health insurance to employers, the small business sector cannot easily fill that function for its employees.