Health Coverage Hits Small Businesses,
Says Chief of National Advocacy Group
San Antonio Express-News, July 16, 2004
Health insurance costs for small businesses are rising more than twice
as fast as those for larger companies, according to Jack Faris, president
of the National Federation of Independent Business, a 600,000-member small-business
At a meeting of nearly 50 San Antonio NFIB members this week, Faris said
small-business health insurance costs are rising between 20-30 percent
a year compared with the 8-9 percent annual increases large corporations
Nancy Fox, who makes health insurance decisions for the 11 employees
of San Antonio-based BioMedical Enterprises, said her company experienced
a 40 percent increase in health care costs in 2002. In the years since,
she said, increases have been about 20 percent.
"Small businesses get the worst end of it by far because they have
much less buying power," said Jack Plunkett, CEO of Houston-based
Plunkett Research. An annual NFIB survey found rising health care costs
to be the top small-business concern. It's held that rank since 1986.
Chuck Toudouze, president and co-owner of Toudouze Market, a 30-employee
wholesale grocery supplier in downtown San Antonio, said providing health
benefits is becoming a real struggle. His company has been experiencing
double-digit increases in health care costs for the past several years.
To cut costs, Toudouze Market has increased deductibles, shopped around
for a provider and begun sharing premium costs with employees.
"We're frustrated we're getting saddled with so many costs we have
no control over," Toudouze said. "It's getting to the point
where we won't be able to afford it (health benefits) anymore."
Rising costs are forcing many small businesses to cut benefits, Faris
said. The percentage of NFIB members providing employee health benefits
has fallen from 62 percent to 58 percent in the past five years.
Nationwide, including companies not involved with NFIB, 40 percent of
small businesses offer health benefits.