Fewer small companies offering health benefits

[Neil D]

By Sarah Skidmore

UNION-TRIBUNE STAFF WRITER

September 15, 2005

The percentage of employers offering health benefits to employees has continued to decline this year, chiefly among small businesses unable to keep up with growing costs.

K.C. ALFRED / Union-Tribune

Scott Smith, owner of Maryjane Salon in Hillcrest, cut a customer's hair. He offers his employees health insurance.

About 60 percent of employers offer health benefits in 2005, down nine percentage points from 2000, according to a study released yesterday by the Kaiser Family Foundation and the Health Research and Educational Trust.

That erosion of workplace benefits has some experts worried.

"This is a slow but perceptible fraying of our employment-based system," said Drew Altman, president of the Kaiser Foundation – "what I call the drip, drip, drip (of health coverage)."

Workplace health benefits are the primary source of insurance for most nonelderly Americans.

The cost of providing coverage rose 9.2 percent in 2005, the first year of single-digit increases since 2000, according to the study. But the increase continues to outpace inflation or wage increases, making it too much for some to bear.

"I don't think you'll see a big cheer (from employers)," said Kate Sullivan Hare, executive director for health care policy for the U.S. Chamber of Commerce.

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Businesses that do not offer coverage said cost remains the primary reason, according to the study. The average annual premium for family coverage reached $10,880 in 2005. Workers pay roughly 26 percent of the costs.

The premium cost eclipsed the gross annual earnings of a minimum-wage worker this year.

Old news is still old

[Dr. Shane]

Small companies can't afford it. Something needs to be done. Health Savings Accounts (HSAs) are a good start. I think all companies should be required to at least provide HSAs for their employees.

As health costs continue to inrease at more than 2 times the rate of inflation, more and more companies will stop providing benefits. The train is starting to wreck.