A majority of businesses in Massachusetts think the state's new health insurance requirements do not go far enough when it comes to small employers, according to a survey being released today that finds broad business support for the healthcare initiative.
State law requires that companies with 11 or more employees offer health insurance or pay a penalty, but 55 percent of employers in the survey believe that the law should apply to all firms.
Surprisingly, support for broadening the requirement was stronger among companies with three to 10 workers, who are not affected by the current law, than among those with more than 1,000 workers.
But the view was not as rosy among small firms that do not offer insurance: A majority of those companies did not want to be subject to the insurance requirement. There is currently no movement afoot in the Legislature to expand the requirement, but observers said the survey results bode well for Massachusetts' insurance initiative.
"If you can retain the support of the business community, it has a higher chance of success," said Jon Gabel, a senior fellow at the National Opinion Research Center of the University of Chicago, which conducted the survey.
A previous state initiative to ensure universal health insurance foundered in the late 1980s largely because of business opposition. This time, many business leaders were part of negotiations leading up to approval of the law in April 2006.
The survey is the first in a series of annual reviews of business reaction to the law that have been commissioned by the Blue Cross Blue Shield of Massachusetts Foundation and the Robert Wood Johnson Foundation.
Gabel and colleagues polled 1,056 randomly selected firms between February and June. The results will be published online today in the journal Health Affairs. Where appropriate, the pollsters compared results with data from a national survey conducted by another organization.
Businesses in Massachusetts were no more likely than those nationally to say they were planning to drop insurance or restrict eligibility for insurance, despite concerns that would happen. Less than 3 percent of small businesses polled here said they were likely to drop coverage.
But 28 percent of employers who do not offer insurance said they planned to limit pay raises so that their workers could continue to qualify for state-subsidized insurance. That insurance is only available to people who make less than 300 percent of the federal poverty level, which is about $31,000 for a single person. Expanded enrollment could strain the state's budget.
"That's certainly an unintended consequence," said Michael Widmer, president of the Massachusetts Taxpayers Foundation, a business-funded group that monitors state spending. "If we actually see employers doing that, we'll have to address it."
The survey also found that premiums for individuals who get insurance through their employer are nearly twice as expensive in Massachusetts as nationally and that insurance costs rose faster in the Commonwealth last year than in the rest of the country.
The state law requires all Massachusetts residents to obtain insurance by the end of this year, if the state deems it affordable. It also requires businesses with 11 or more full-time equivalent employees to pay a fee of up to $295 per employee per year unless they offer to pay at least 33 percent of individual employees' insurance premiums. The state is about to begin collecting the fee, which Gabel said represents about one-tenth the average company cost of providing insurance.
Small businesses were exempted from that requirement because lawmakers felt it would be too big a financial burden. Some small business groups, including the National Federation of Independent Business, had opposed the mandate. But yesterday, Bill Vernon, the group's state director, said small companies that offer health coverage back the idea of extending the law because they "want a level playing field vis-a-vis their competitors."
Jon Hurst, president of the Retailers Association of Massachusetts, which represents both small and large businesses, said the state needs to find a way to lower premiums for small firms that offer insurance. "If something isn't done about costs," Hurst said, "I think you're going to see those attitudes change fairly rapidly."
Alice Dembner can be reached at dembner@globe.com.
The survey will be available at healthaffairs.org and at bcbsmafoundation.org.
