Small businesses giving up health coverage

According to a report released from the Kaiser Family Foundation and the Health Research Educational Trust, the number of small businesses (less than 200 employees) offering healthcare benefits shrank from 68 percent to only 59 percent between 2000 and 2005.

The decline is even steeper for companies with less than 10 employees. Only 47 percent of these smallest employers offered health care benefits in 2005, down from 57 percent in 2000.

"It is low-wage workers who are being hurt the most by the steady drip, drip, drip of coverage draining out of the employer based health insurance system," said Drew E. Altman, CEO and president of the Kaiser Family Foundation.

Although the growth in premiums slowed compared with 2004, the study found they were growing more than three times faster than employee's wages and two-and-a-half times the rate of inflation. In 2005, premiums increased on average 9.2 percent compared with 2004; premiums were up 73 percent compared with 2000.

The survey also reported on the growth of high-deductible health plans and the use of health savings accounts.

Source: Kaiser Family Foundation, as reported in LM Week in Review, Sept. 26, 2005. Eight-page, illustrated executive summary (PDF -- 376KB; 55 sec. on a 56K modem) available.