Survey Reveals Threat of Rising Health Care Costs


By Staff
(AXcess News) Washington - A survey assessing the impact of
rising healthcare costs on the smallest segment of the U.

S.
business population was released today by the National Association
for the Self-Employed (NASE) that showed that 62% of micro-business
owners cited cost as the greatest barrier to obtaining insurance
coverage for their employees.
NASE said thatmicro-businesses are often cited as the drivers of
America's economic engine, creating well over a third of all new
jobs.
The data collected in the NASE survey were segmented to explore
key differences among respondents, including number of employees
and total 2004 gross sales, both critical factors in determining
the impact of rising health care costs on a business.


The NASE survey, unsurpassed in its segmentation of businesses
with 10 or fewer employees, provides unique insight into the health
care challenges and preferences facing micro-business owners based
on size, annual sales, gender and region.
"Every day, this group struggles with the increasing costs of
health coverage for themselves, their families, and their
employees," said Robert Hughes, president of the NASE. "This survey
shows just how serious the problem is for micro-business owners and
their employees, the lengths they must go to acquire coverage, and
how great the need for realistic solutions to the growing health
care crisis."
A majority of survey respondents (51.

1%) say they do not
currently offer, nor plan to offer, a health insurance plan through
their business for themselves or their employees. The smallest
companies are most impacted, with only 13.8% of companies that
grossed less than $50,000 annually offering health insurance
compared to 70% among those grossing more than $500,000 yearly.
According to respondents, cost continues to be the most important
factor, Hughes said.


Nearly 62% cite cost as the single most significant barrier to
offering health care to employees andseven out of 10 (68.9%)
companies grossing between $50,000 and $99,999 annually currently
do not offer health insurance through their business for their
employees or themselves.
Over 85% of the survey respondents stated that their health
insurance premiums had increased in the past 12 months, with a
median premium increase of 17.3%.


The survey also found that small businesses with the least end
up paying the most in terms of health insurance costs.
Micro-businesses grossing less than $50,000 annually spent a median
of 18.7% of their gross 2004 sales on health insurance, compared to
a median of only 2.3% spent annually by companies generating more
than $500,000 annually.

Business owners with 10 or fewer employees
spent nearly four percent of their total annual revenue on health
insurance in 2004.
The NASE survey offered some interesting insight into one of the
most frequently mentioned solutions to rising health care costs -
the new health savings account or HSAs. Available since January
2004, HSAs combine a high deductible health insurance policy with a
tax-free savings account. Individuals can deposit money tax-free
into the account up to a certain amount per year.

Employers can
also contribute money tax free into the health savings account on
behalf of their employees.
According to the NASE study, overall awareness and appeal of
HSAs is high across all segments, although most don't take
advantage of this option. More than 82% of respondents acknowledged
having heard of HSAs, yet only 5.9% said they have established an
HSA account.

Nearly 65% of those who are presently uninsured
expressed high interest in establishing an HSA versus 55.8% of
those with an existing health care policy in place.
Readers interested in obtaining a complete copy of the survey
can contact either Katy Dyer at 202-466-2100,
kdyer@nase.org,
or John Stauffer at 202-223-4933,
jstauffer@stantoncomm.

com

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