Health Care Smacks Small Biz

One out of five small businesses expect their health insurance premiums to rise more than 20 percent next year, a new survey found.

The National Small Business Association says small firms continue to get socked by soaring health care costs. More than 90 percent of business owners say they expect their premiums to rise for an average increase of 13 percent.

The findings support other studies showing the challenges for small employers. According to the latest survey more than 60 percent of employers are freezing salaries, almost a third are holding off on hiring, and 19 percent are laying off employees because of high health care costs.

Another survey by the Kaiser Family Foundation found that the average annual cost of family plans for small firms are actually less than those for bigger employers ($12,696 versus $13,704) but a greater share of the cost is being passed on to the employees.

Workers at small companies contributed more last year for their share of family health coverage, paying $4,204 versus $3,182 paid by employees at bigger firms, the Kaiser survey found.

The Kaiser survey looked at all employer-based health plans, concluding the average family premium rose 5 percent last year to $13,375. The amount represents a 34 percent increase over the past five years and a 131 percent jump over 10 years.

About 60 percent of employers offer their workers health insurance, but that number is lower for small businesses. For employers with three to 199 workers, 49 percent offer employee health insurance.