Minority-owned small businesses and employer-sponsored health insurance

Abstract

Employer-sponsored health insurance (ESI) is a primary source of health coverage for working-aged adults in the U.S. Although most larger employers offer ESI, 46% of U.S. workers are employed by small businesses, which offer ESI at less than half the rate of large businesses. We extend prior research by examining detailed racial/ethnic ownership of small businesses and trends in offering ESI throughout the rollout of the Affordable Care Act's (ACA) small business policies. We use restricted data from the Census Bureau's 2012 Survey of Business Owners and the 2014–2016 waves of the Annual Survey of Entrepreneurs. Binary logistic regression allows us to examine whether the racial/ethnic composition of the business owners is associated with offering ESI, within each of the four waves of data. Finally, we plot the fitted percentage of small businesses that offer ESI across time and racial/ethnic ownership status, while adjusting for owner and firm characteristics. The majority of small businesses do not offer ESI. Further, disparities are substantial. In 2012, just 41% of White-owned small businesses offer ESI, compared to 26% of Black-, 26% of Asian-, and 23% of Hispanic-owned small businesses. These disparities fail to improve across years when the ACA incentives were implemented. Policies that recognize and address differences in ESI among small businesses, especially among Black-, Asian-, and Hispanic-owned small businesses, could strengthen healthcare systems and access to care in communities where minority-owned small businesses and their employees are located.