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Business Owners Worry About Employees' Health Insurance Coverage

Posted on: Tuesday, 20 September 2005, 21:00 CDT

Faced with rising health care costs, small, medium and large businesses say they must continue to pass a portion of the increased costs on to their employees by requiring them to pay a mounting share of the premiums, co-pays or deductibles, a new survey of business leaders shows. Four in five business owners (79 percent) who anticipate increases in their health care costs say they are concerned about their employees' ability to shoulder the projected increases.

The Robert Wood Johnson Foundation released Attitudes of Business Leaders Regarding Health Care Coverage at a Capitol Hill briefing led by legislators, governors and Fortune 500 executives. The survey of more than 600 business owners and benefits managers whose companies currently pay for at least some health insurance benefits shows that companies of all sizes expect health care costs to jump an additional 12 percent over the next year. Business owners surveyed say they will ask their employees to pay an average of 21 percent of the increase. Survey respondents estimate that their employees currently pay, on average, 29 percent of the cost of their own health insurance premiums - up 6 percentage points from 2003.

According to figures from the Kaiser Family Foundation and the Health Research Educational Trust, premiums average $10,880 annually for family coverage ($907 per month) in 2005 and $4,024 ($335 per month) for individual coverage.

Business leaders know firsthand how important it is to offer health insurance, both because it improves the health of the work force and because it makes their businesses more attractive to employees, said Risa Lavizzo-Mourey, MD, MBA, president and CEO of the Robert Wood Johnson Foundation. Small and midsized companies have long struggled to provide affordable health insurance for their employees, but now large companies with thousands of employees are finding it difficult to offer affordable health coverage. Our nation's leaders need to act on this issue before more and more working Americans find themselves unable to afford health care coverage.

The survey was conducted by Public Opinion Strategies, Alexandria, Va., and has a margin of error of plus or minus 3.89 percent. It shows:

* Employers worry that their work force may drop insurance because of rising costs. More than one-third (35 percent) of businesses that report an expected increase in health care costs say it is likely their employees would consider dropping their health care coverage because of this increase in out-of-pocket costs.

* Businesses are focused on affordability of health care. The goal of making health care more affordable is a top priority among businesses, with half (53 percent) citing this as the most important health care goal that should receive the greatest attention in health care reform efforts.

* Business leaders support a range of policy proposals. Among a range of policy proposals tested, business owners and benefits managers expressed strong support for granting tax credits to small businesses that offer insurance coverage and for allowing the self- employed and small businesses to band together to purchase insurance. When asked which ideas would help a lot to increase the number of Americans with health coverage, business leaders responded:

a.) Allowing the self-employed and small businesses to purchase private health insurance at group rates. (53 percent)

b.) Providing tax incentives for small businesses to encourage them to provide health coverage to their employees. (41 percent)

c.) Enrolling more Americans who are eligible for government- funded health care programs. (27 percent)

d.) Expanding Medicaid coverage to include a greater number of lower-income Americans. (26 percent)

e.) Providing tax credits for low-income Americans to help them afford private insurance. (23 percent)

f.) Allowing Americans to set up tax-free health savings accounts. (21 percent)

The survey underscores what some of the nation's top business leaders, health policy analysts and labor economists have been saying for many months: As the price of health care coverage continues to rise, fewer businesses, individuals, families and government programs can afford to pay for coverage - and more Americans will be forced to go without health insurance.

According to numbers released last month from the U.S. Census Bureau, nearly 46 million Americans had no health insurance in 2004. The census reported that the percentage of Americans who receive their health insurance from employer-sponsored coverage declined significantly between 2003 and 2004.

Businesses in America have a long tradition of offering comprehensive health care benefits to their employees, which is how most Americans receive health care coverage, but this practice is increasingly in danger, said Lavizzo-Mourey. Large businesses are having to redefine the terms of their plans in order to keep offering benefits, and many small and medium-sized businesses are forced to stop offering coverage altogether.

To help small-business owners identify and evaluate their health coverage options, a free, downloadable resource, the Guide to Health Insurance Options for Small Business, is available at http:// www.CoverTheUninsured.org. The guide was prepared by the Robert Wood Johnson Foundation in collaboration with the Healthcare Leadership Council and with guidance from the U.S. Chamber of Commerce, America's Health Insurance Plans and the Blue Cross Blue Shield Association. The guide provides small-business owners with key information on coverage - various plan options, tax advantages for providing employee coverage, tools to help estimate the cost of providing coverage, information on employee cost-sharing, and more. The poll results released today can also be found at http:// www.Cover theUninsured.org or http://www. RWJF.org.

Source: St. Charles County Business Record

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