December 16, 2009

Study finds Tennessee service industry workers and the young get less health care coverage at work

They’re on the frontline of the workday world – filling our coffee cups, trimming our hair, holding Sunday open houses – but workers in some service jobs in Tennessee are at a higher risk of not having access to health care coverage through their employers, according to a study conducted by researchers from Vanderbilt University’s Peabody College and the Tennessee Small Business Coalition.

In addition, young and part-time workers in Tennessee are more likely to miss out on this coveted job benefit, and businesses with fewer employees and gross revenues under $1 million are less likely to offer it.

“Small businesses is the backbone of our economy, but their employees are at the most risk of not having health care coverage. It is critical that we better understand their experiences and the barriers to coverage,” Craig Anne Heflinger, professor of human and organizational development in Peabody College and a member of the Vanderbilt Center for Community Studies, said.

The survey was conducted by Heflinger and Marielle Lise Lovecchio, professional student in the Peabody Community Development and Action Program; Jill Robinson, doctoral student in the Peabody Community Research and Action Program; and Lori Smith of the Tennessee Small Business Coalition.

In the study, “Tennessee’s Small Businesses and Factors Influencing Health Insurance Coverage,” survey respondents cited expense as the key reason for not offering their employees a health care plan. Among the survey respondents who did not offer a health care benefit, 76 percent cited cost as the reason.

The researchers also found the financial burden for offering this benefit may be greater for Tennessee small businesses than those in other states. The survey shows they are committing a greater percentage of payroll for health insurance coverage than similar employers in other states and that the cost seems to keep rising. A little more than half the small-business survey respondents offering health care coverage said total health care costs had increased more than 10 percent from the previous year.

Less than half of the small businesses – 44 percent – agreed that businesses have a responsibility to offer health insurance to their employees, while those currently offering a plan were much more likely to see negative impacts from not providing that coverage.

The researchers mailed surveys in March 2009 to small businesses in Tennessee that employ 50 or fewer workers and were randomly selected from the Dun and Bradstreet “Million Dollar Database,” with 245 responding within 60 days. The respondents represented Tennessee’s three major geographical divisions, with slightly more than half located in urban areas and nearly half working in retail/wholesale, restaurant/food industry, construction and industrial/manufacturing businesses.

The study received funding from Consumer Voices for Coverage, a national program of the Robert Wood Johnson Foundation and Community Catalyst, and from the Small Business Majority. The full report is available on the Vanderbilt Center for Community Studies website:

A study by the same authors released in July 2009 showed that a majority of the Tennessee small-business employers who responded to the survey are struggling to afford the cost of health care coverage and almost all agreed on the need for affordable, quality health insurance plans to cover all Americans. That report is also available at:

Release written by Elizabeth Older, Center for Community Studies.

Media contact: Melanie Moran, (615) 322-NEWS