Article: More could lose health benefits

Many businesses likely to drop coverage in '06, poll says

Friday, December 16, 2005

Ken Stammen, The Columbus Dispatch

It’s becoming a familiar — and distressing — theme for workers: employers dropping health-care coverage.

Expect more of the same.

One in five respondents to the Ohio Society of CPAs 2005 Statewide Ohio Business Poll said it is likely that a significant number of employers will eliminate health-care coverage for their employees in 2006. Forty-one percent said it is somewhat likely.

The reason cited was cost. Two-thirds of those answering the survey predicted that health-insurance costs will rise between 10 percent and 20 percent in the new year.

Jim Newton, chief economic adviser at Commerce National Bank, said he doesn’t think that large numbers of employers will eliminate health insurance but, instead, likely will pass more health costs to workers by raising deductibles and co-payments.

"It’s becoming prohibitively expensive to fully fund everyone’s health benefits," he said.

Business leaders named health-care costs as one of the top four deterrents to economic growth in Ohio. The others were rising fuel prices, government regulations and outsourcing.

The group surveyed 850 members in senior leadership posts.

The Ohio survey results come nearly three months after a national survey showed that the number of businesses providing health-care coverage fell to 60 percent this year, down from 69 percent in 2000. That study, by the Kaiser Family Foundation and the Health Research and Educational Trust, found that small employers were responsible for nearly all the decline.

Health costs have increased 73 percent since 2000, the Kaiser foundation said.

The Ohio CPA survey also found that most employers don’t expect to give big pay raises next year. Three-fourths said increases will average 1 percent to 3 percent; 20 percent said raises will be in the 4-percent-to-6-percent range.

Forty-seven percent said they expect the economy to stay the same in 2006; 26 percent said it will get stronger and 26 percent said it will get weaker.

kstammen@dispatch.com