Small businesses to hike insurance premiums

More than 92 percent of small businesses are planning to increase their insurance premiums during the upcoming year – some as much as 20 percent.

“The cost of health insurance has dire implications on small business job creation,” said Todd McCracken, president and CEO of the National Small Business Association, which annually conducts a small business health care survey. “Premium increases forced 31 percent of small businesses to hold off on hiring a new employee, and 19 percent to actually lay off an employee. This cannot continue if we have any hope of economic growth in the future.”

Offering health insurance to employees is a significant disadvantage for small businesses that must compete with larger companies, he said.

Because of the way the small group market is structured, premiums for smaller companies are sometimes as much as 18 percent higher than for larger companies. But nearly 80 percent believe that offering health benefits provides their company an advantage when recruiting and retaining employees.

The overwhelming majority – 73 percent – were opposed to a requirement that employers make a financial contribution to health plans or pay a fee. Affordability is a key tenet in small business owners’ ability to provide health insurance. More than 63 percent of small business owners who don’t provide insurance said they would, if it were cheaper.

“Today, despite the very contentious public debate over how to fix the U.S. health care system, 62 percent of small business owners believe passing some kind of health care reform in the next year is important,” said Keith Ashmus, NBSA chairman and co-founding partner of Frantz Ward LLP in Cleveland, Ohio. “The key is enacting reform that won’t make costs go up – reform that guarantees access, affordability and quality while ensuring American small businesses are no longer at a competitive disadvantage.”