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Small Employers Want To Sidestep Giving Benefits

MANAGED CARE February 2002. © MediMedia USA
News and Commentary

Small Employers Want To Sidestep Giving Benefits

MANAGED CARE February 2002. ©MediMedia USA

The recession and higher medical costs are causing small employers to take a hard look at their sponsorship of health benefits. William M. Mercer, the consulting company, has found in a survey that 13 percent of small companies are considering ending company-sponsored benefits.

Yet increasing the share of small companies that offer coverage is "seen by many as the most likely way" to reduce the number of uninsured, the Wall Street Journal reports. During the economic boom of the late 1990s, that seemed to work, as small companies competing for employees in a tight labor market had to offer competitive benefits.

Now, with rising medical costs and falling sales, companies are looking to cut anywhere they can, and health benefits seem to be a choice target.