Essay on Rising Health Care Costs

818 WordsJul 7, 20064 Pages
Rising Health Care Costs for Small Employers One of the biggest problems small employers face today is the steadily rising costs of health coverage for its employees. This paper covers how health care premiums have risen in double digits for the past five consecutive years, how many small businesses are forced to drop health care coverage for their employees because of the out of control costs, and what small businesses are doing to control the costs and still offer health care coverage to their employees. The good news is that small businesses have been doing better than the overall economy. During the past few years, they have overcome rough times and developed a resiliency that is serving them well. The bad news is that the rising…show more content…
The small businesses characteristics, including whether a small firm is a component of a larger business, the composition of its workforce, and the industry of which it is a part, are the most important factors in determining an employer's ability to acquire affordable health coverage for its employees. Despite the high cost of premiums and the cost of administering the benefit, small employers state many important business reasons for offering health insurance coverage to its employees. Most say they provide health benefits because it helps with employee recruitment, increases employee loyalty, and decreases turnover. They also note that these benefits positively affect employee attitude, performance, and health. The most important reason for offering health insurance coverage, small employers say, is that "it is the right thing to do." The most significant reason for a small business employer's decision not to offer health benefits however is the skyrocketing costs. So what can a small business employer do to maintain its health care coverage for its employees? Possibilities are reducing benefits, shifting more of the cost of the premiums to its employees, requiring employees to pay high co-payments when they visit a doctor, switching from a PPO to a HMO, and covering only employees rather than including family members. Higher deductibles and out-of-pocket expenses may be another
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