The Sickly State of Small Business Health Care

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Conditions just keep getting worse for employer sponsored health care. While many large companies are managing to foot the bill, small businesses are struggling to afford what in many employees' minds is a must-have benefit. A September 2005 survey from the Kaiser Family Foundation and the Health Research and Educational Trust notes the steady decline in businesses offering health benefits since 2000, as the rising cost has outpaced inflation year after year. More recently, in a January 9, 2006, article (membership required), the Society for Resource Management (SHRM) spoke to a number of experts who predicted the employer-sponsored health care system will eventually collapse. Furthermore, the article notes that small employers will be forced to push the cost onto employees, and employer programs at the low-end of the wage scale will dwindle away.

To cover workers, state-run programs, such as the controversial program proposed by the Massachusetts House of Representatives, and consumer directed health plans, such as health reimbursement accounts (HRAs) and health savings accounts (HSAs), are trying to fill the need, though not always adequately. Individual insurance plans are cropping up, too, as options for employers who want to help, but just can afford to sponsor a plan. And the single-payer government system is again on the table. The SHRM story notes that experts have mixed reviews on its ability to adequately replace an employer-sponsored system, as some say the public monies just aren't there to support it.

So what is the solution? Amidst all of them, it's hard to find one approach that can effectively replace what many workers have come to view as a natural part of their working lives. At the very least, these options illustrate a growing commitment to finding a solution, and more innovative thinking on tackling the issue. What are your suggestions for handling the rising costs?