The rest worked for firms with 100 or more workers. There are a number of reasons for this trend. National data show that small firms are much less likely to offer coverage to their employees than larger ones. Small firms' per capita costs for health insurance are significantly higher than their larger counterparts. In part, this is due to the higher risks and higher average administrative costs associated with small businesses.
Larger firms can spread risk and administrative costs over more workers.
In addition, these firms have more clout in the market place when negotiating rates with health insurers. In 1991, the Bourget Research Group conducted a survey of Connecticut businesses to gauge small business attitudes toward health insurance and explore why some firms do not offer coverage to their employees. The survey found that among firms of fewer than 25 employees, about 65 percent offered health insurance, while about 35 percent did not. Among these firms, those with fewer than 4 employees were the most likely not to offer health benefits. Other frequently cited reasons included having too few employees, plans being too costly or complicated to administer, and having been turned down for health reasons.