A new survey by the nonpartisan National Small Business Association found that 91 percent of business owners saw health plan costs increase at their most recent renewal. About one in four owners surveyed saw the increases go up more than 20 percent.
The average monthly premium for one-employee coverage is $1,121. A somewhat similar NSBA survey five years ago found the average cost was only $458, meaning premiums have more than doubled in that timeframe.
Business owners said these rising costs of health insurance forced them to make tough choices.
“These costs have real-world implications,” said NSBA President Todd McCracken in a news release. “One-third of small businesses held off on hiring a new employee, and more than half say they held off on salary increases for employees.”
The majority of employers agreed that health insurance is important for recruiting employees. And yet only 51 percent of the smallest firms offer health benefits, NSBA found.
The survey is sure to add fuel to the fire of Obamacare critics who say the Affordable Care Act puts undue cost pressures on small employers and will hinder the much-needed recovery of the U.S. economy and jobs market.
Of course, this isn’t the first time health insurance premium increases have pinched business owners in recent years. The Kaiser Family Foundation’s 2013 Employer Health Benefits Survey found that employer premiums rose only 4 percent on average between 2012 and 2013. However, it notes that premiums were up 80 percent over the past 10 years. (U.S. inflation was only 27 percent that same period.) Many employers saw double-digit increases to their premiums through much of the early 2000s.
Moreover the latest survey may not show the true effects of Obamacare: Many small-business owners renewed their policies early in 2013 so they could lock in non-ACA-compliant policies for one more year. These businesses will find out the real cost of health care reform when they renew again later this year.
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