A needle in a haystack? Uninsured workers in small businesses that do not offer coverage

To describe the insurance status of workers at small businesses, and to describe the status of uninsured persons by the employment characteristics (employment status, firm size, and whether the employer offers insurance) of the head of household.

Data from the March and February 2001 Current Population Survey, and a survey of 2,830 small businesses in San Diego County conducted in 2001.

The survey of small businesses was undertaken as part of a project testing the response of employers to offers of subsidized coverage. Employers were asked whether they offered insurance, and about the insurance status of their employees. The merged February-March 2001 CPS was used to identify the employment status, firm size, and employer-offering status for uninsured persons in the U.S.

Telephone interviews with small businesses in San Diego County.

Only 21 percent of the uninsured in the U.S. are full-time employees (or their dependents) in small businesses (<100 employees) that do not offer insurance. The employment status of the uninsured is heterogeneous: many work for large employers, small employers who do offer insurance, or are self-employed, part-time workers, or have no workers in the household. Although there are many small businesses in San Diego that do not offer coverage, most of them have very few uninsured workers. Over 50 percent of businesses that do not offer coverage have either zero or one uninsured worker. There are very few small businesses that do not offer coverage and that have substantial numbers of uninsured workers. These businesses are not quite as rare as a needle in a haystack, but they are very difficult to find.

If all small businesses that do not offer insurance now could be persuaded to start offering coverage, and if all the full-time workers (and their dependents) in those businesses accepted insurance, the number of uninsured would decline by 21 percent--a significant decline, but leaving 80 percent of the problem untouched. If the prime target for programs of subsidized insurance are small businesses that do not offer coverage now and that have substantial numbers of uninsured workers, the target is very small.