Small businesses face tough choice: Drop health insurance or cut jobs


More and more small businesses face a Hobson's choice: eliminate their employee-sponsored health insurance plans or start eliminating jobs. With health insurance premiums topping $800 for single employee coverage per month in many states, covering just three or four workers can mean one less position in a small company. Health insurance premiums for small businesses rose 74 percent from 2001 to 2008, according to the non profit research group the Kaiser Family Foundation.

The National Small Business Association said that 10 percent of small businesses are thinking about eliminating coverage over the next year. That's up from three percent in 2005. Hewitt Associates found in their recent survey that 19 percent of all companies plan to stop providing health-care benefits in the next three to five years.