This brief examines the differences in employer‑provided benefits between micro and small businesses (≤50 full-time equivalent employees) and medium and large businesses (≥100 full-time equivalent employees). Our analysis finds that workers at smaller firms often lack access to health, retirement, life/disability, and financial benefits. We quantify these access and take-up gaps and provide policy and market strategies to expand benefits for workers in smaller businesses.
Why This Matters
Workplace benefits shape employees’ financial security and influence recruitment, productivity, and retention for employers. Yet access remains uneven. Small businesses, facing thinner margins, limited administrative capacity, and volatile revenue, often struggle to match the breadth of benefits that larger firms can provide through economies of scale. To help close the benefits gap, policymakers, lenders, benefit providers, and small‑business support organizations could provide support to reduce costs and administrative barriers for smaller businesses.
What We Found
This brief documents large, consistent gaps in employer‑provided benefits between micro and small businesses (≤50 FTEs) and medium and large businesses (≥100 FTEs).
2024 Employee Benefits Access Rates
For civilian workers in the private sector
| Benefit type | Employee access rate at micro and small businesses (≤50 FTEs) | Employee access rate at medium and large businesses (≥100 FTEs) |
|---|---|---|
| Medical care benefits | 55% | 88% |
| Dental care benefits | 27% | 59% |
| Vision care benefits | 18% | 39% |
| Health savings account | 26% | 54% |
| Defined benefit plans (pensions) | 6% | 25% |
| Defined contribution plans (401k/403b) | 54% | 85% |
| Life insurance plans | 38% | 78% |
| Long-term disability plans | 22% | 54% |
| Short-term disability plans | 30% | 61% |
| Financial planning | 14% | 39% |
| Student loan repayment plans | 4% | 9% |
| Nonproduction bonuses | 41% | 55% |
Source: Authors’ analysis of US Bureau of Labor Statistics 2024 Employee Benefits Survey.
Note: FTE = Full-time equivalent.
Based on our analysis, our policy and practice recommendations are as follows:
- Incentivize benefits adoption through financing tools and preferred lending terms for firms that expand benefits.
- Expand advisory services and toolkits to reduce administrative barriers for small employers.
- Scale pooled purchasing and portable benefit models to lower costs and administrative burdens.
How We Did It
We analyzed the US Bureau of Labor Statistics 2024 Employee Benefits Survey (part of the National Compensation Survey), focusing on private‑sector W‑2 workers. We grouped employers by size (≤50 full‑time‑equivalent employees and ≥100 full‑time‑equivalent employees), then calculated and compared benefit access and take‑up rates across those two groups.
