The constantly rising cost of insurance has forced many
employers to eliminate health insurance benefits for employees.
The percentage of companies offering health insurance dropped 3%
in 2004, to 60 percent. Most U.S. companies that do not offer
health care benefits cite rising costs as the determining
factor. Health insurance premiums rise from 9 to 11 percent or
more on an annual basis. The result is a slow but steady decline
in the availability of traditional employment-based health care
coverage. The majority of businesses who dropped health
insurance coverage have less than 100 employees. 98 percent of
larger companies with 100 or more employees offer health care
benefits.
The cost of health insurance was the deciding factor for most
companies, with some businesses reporting that they had to few
employees to negotiate with insurance companies for lower rates.
The increasing competition from businesses in foreign countries
has forced some U.S. companies to eliminate traditional health
care coverage in favor of limited health care benefits for
employees. Employers have been forced to pass more of the cost
of health insurance coverage on to employees, with the smaller
companies being unable to afford coverage at all.
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