Health-Care Headaches

Health-Care Headaches

Small and midsize manufacturers grapple with rising health-insurance costs.

Nearly half of small and midsized businesses surveyed by a consultancy firm say they don't offer health insurance to their employees as they struggle to stay afloat in the current economic downturn. Of 912 business owners responding, 46% say they don't provide health insurance for their employees, according to the report published in July by George S. May International, a Park Ridge, Ill., company that advises small and midsize companies, including manufacturers.

Another survey released the same month concludes that 60.1% of manufacturers increased employee premiums to reduce costs in 2009, according to the 2009 Compensation Data Manufacturing survey conducted by Compdata Surveys.

Of the 1,200 companies responding, the average premium increase for the year was 9.6%, up from 7.1% the previous year, but down from 11.4% in 2007.

"Medical plans continue to be a source of scrutiny, as high health-insurance costs are cutting into organizations' bottom lines," says Amy Kaminski, manager of marketing programs for Compdata Surveys.

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