Another 13 percent worked for firms with between 25 and 99 employees. 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. As a result, the employees of small firms are disproportionately represented among the uninsured. While the issues involving small employers are clearly very significant, they do not account for the whole problem. Over 40 percent of uninsured workers are employed by medium and large firms. Two researchers, Long and Marquis, have done extensive work in this area and have concluded that the gaps in coverage are largely a failure of supply.