Small Business Benefits Threatened

Employers are expected to shift costs onto workers, health plan execs say.

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The deepening economic crisis is expected to force many small businesses to slash employee health care plans, industry insiders say.

Of 30 senior health plan executives recently surveyed by CSC, a health care information services firm based in Falls Church, Va., 54 percent said they expected small business enrollment to drop as firms fail and cut costs by axing benefits. By contrast, less than 31 percent said they expected fewer renewals by larger employers.

Employers that don't eliminate health plans will likely shift additional costs onto employees through higher deductibles and lower premiums, respondents said.

“As businesses look to reduce costs, many will choose products that shift financial responsibility to employees, and others will choose to drop health benefits altogether,” Deward Watts, president of CSC’s global healthcare sector, said in a statement.

Most respondents said they foresee a bigger impact on health-care plans than during the 2001 recession. Many are concerned about the downturn’s impact on provider networks, along with cash flow problems and lower availability, the survey found.

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