Fewer small businesses offer health insurance

The number of small businesses that offer health insurance to employees continues to decline, according to a new report from the Colorado Division of Insurance.

The 2011 Colorado Small Group market Activity report shows that the number of small businesses that offer health insurance dropped by 7 percent. However, the biggest drop was in single-employee businesses – known as business groups of One – which dropped by 35 percent last year.

There was a single bright spot in the report. The number of health plans offered by employers with 26 to 50 employees grew by 53 percent and covered 18,628 more lives in 201 than in 2010.

“Small businesses continue to play a vital role in Colorado’s health insurance market,” said Insurance Commissioner Jim Riesberg. “It is encouraging to see the increases in health coverage for employees who work for some of the large companies within the small group market, but the smallest employers are still struggling to provide health insurance.”

The small group market is made up of employers who provide employee health coverage through a Colorado-regulated health benefit plan, and have no more than 50 eligible employee sin Colorado for at least half the year.

Other findings in the report:

– The total number of people covered in the small group market dropped by 4 percent.

The total number of small group employees dropped by 2,210, a 7 percent decrease from 2010.

The number of plans for employers with 1 to 5 employees shrank, while plans for employers with six to 50 employees increased.

-The number of group plans for employers with 26 to 50 employees grew by 342, or 53 percent and covered 18,628 more employees in 2011. Small employers shifted to more multi-option plans that provide employees with more choice and decreased the use of health Savings Accounts.