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Response Rate
Kaiser/HRET drew its sample from a Dun & Bradstreet list of the nation’s private and public employers with three or more workers. To increase precision, Kaiser/HRET stratified the sample by industry and the number of workers in the firm. Kaiser/HRET attempted to repeat interviews with prior years’ survey respondents (with at least ten employees) who also participated in either 2004 or 2005. As a result, 1,426 firms in this year’s total sample of 2,122 firms participated in either the 2004 and 2005 surveys.4 The overall response rate is 48%. Exhibit M.3 shows the respondent status by region and state.
The vast majority of questions are asked only of firms that offer health benefits. A total of 1,923 responding firms indicated that they offered health benefits. The overall response rate of firms that offer health benefits is 50%.
From previous years’ experience, we have learned that firms that decline to participate in the study are less likely to offer health benefits. Therefore, we asked one question to all firms in the study with which we made phone contact where the firm declined to participate. The question was, “Does your company offer or contribute to a health insurance program as a benefit to your employees?” A total of 3,159 firms responded to this question (including 2,122 who responded to the full survey and 1,037 who responded to this one question). Their responses are included in our estimates of the percentage of firms offering health benefits.5 The response rate for this question is 72%.
Firm Size and Industry Definitions, Rounding, and Imputation
Throughout the report, exhibits categorize data by size of firm, region, and industry. Firm size definitions are as follows: All Small, 3 to 199 workers; and All Large, 200 or more workers. Occasionally, firm size categories will be broken into smaller groups. The All Small group may be categorized by: 3 to 24 workers and 25 to 199 workers; or 3 to 9 workers, 10 to 24 workers, 25 to 49 workers, and 50 to 199 workers. The All Large group may be categorized by: 200 to 999 workers, 1,000 to 4,999 workers, and 5,000 or more workers. Exhibit M.1 shows detailed characteristics of the survey sample.
Exhibit M.2 displays the distribution of the nation’s firms, workers, and covered workers (employees receiving coverage from their employer). Among the over three million firms nationally, approximately 60% are firms employing 3 to 9 workers. In contrast, firms with 5,000 or more workers employ and cover about 35% of employees. Therefore, the smallest firms dominate any national statistics about what employers in general are doing. In contrast, firms with 5,000 or more workers are the most important employer group in calculating statistics regarding covered workers, since they employ the largest percentage of the nation’s workforce.
The industry categories used to report some of the results from the survey are based on Standard Industrial Classifications (SIC). Several of the SIC categories are grouped together to present the data. These categories are based on historical precedence and have been the same for several years. This year Kaiser/HRET made a slight change to one of the industry groups: we removed Wholesale from the group that also included Agriculture, Mining and Construction. The nine industry categories now reported are: Agriculture/Mining/Construction, Manufacturing, Transportation/Communications/Utilities, Wholesale, Retail, Finance, Service, State/Local Government, and Health Care.
The Kaiser/HRET survey compares premium increases to changes in workers’ hourly wages and overall inflation, both obtained from the Bureau of Labor Statistics (BLS). Workers’ hourly wage change is calculated from the Current Employment Statistics survey (CES)6 using seasonally adjusted data for private workers. Overall inflation is calculated using the Consumer Price Index for all urban consumers (CPI-U).7 We report annual increases in these data from April of the prior year to April of the current year because this is typically the field time of the survey. We note, however, that both fluctuate depending on the months used. Therefore, these estimates would have been slightly higher or lower than the amounts reported (3.5% for overall inflation, 3.8% for workers’ earnings) if different months had been used. For example, the May to May estimates are 4.2% for overall inflation and 3.7% for workers’ earnings.
Some exhibits in the report do not sum up to totals due to rounding effects. In a few cases, numbers from distribution exhibits referenced in the text may not add due to rounding effects. Throughout the report, while overall totals as well as totals for size and industry are statistically valid, some breakdowns may not be available due to limited sample sizes. In instances where the sample size is less than 30, exhibits include the notation NSD (Not Sufficient Data).
To control for item nonresponse bias, Kaiser/HRET imputes values that are missing for most variables in the survey. On average, less than five percent of these observations are imputed for any given variable. The imputed values are determined based on the distribution of the reported values within stratum defined by firm size and region. There are a few variables that Kaiser/HRET has decided should not be imputed; these are typically variables where “don’t know” is considered a valid response option (for example, firms’ opinions about effectiveness of various strategies to control health insurance costs).
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