More employees of US small businesses are losing their health insurance.

The Small Business Administration reports that health insurance premiums continue to increase and the projection is that by 2025 a quarter of the US economy will be spent on health care. 

As premiums have increased, the number of businesses offering health insurance to employees is falling, reducing from 63% to 60% in the last year.

This is accentuated in small firms, those with less than 10 employees, where firms offering coverage reduced from 57% in 2000 to 46% in 2009. 

The reason small businesses are having such difficulty maintaining employee health cover is the higher premiums they are asked to pay, 18% higher than large firms, and administration costs which are four times higher than for large companies. 

Almost 3 million employees, who are uninsured, work for firms with less than 25 staff. Over the last two years, 25% of employees of small businesses lost their health cover. 

Half of the individuals working for businesses who don’t offer health insurance have no private cover. The option of private cover is not viable for most due to the high cost, with no premium limits being applicable in 33 states, and broad exclusions which can be applied by insurance companies in effect in 45 states. 

Reforms currently being discussed would give small businesses tax credits to assist with employee health care costs and allow people to switch jobs without loss of cover. The changes would also not allow insurers to discriminate based on age, gender or prior conditions. 

With the unemployment rate increasing from 5.8% in 2008 to 8.9% in 2009, 4 million workers lost their health cover, increasing the number uninsured to over 50 million. 

The reform of health care is critically important and very difficult to enact due to the power of the vested interests involved. Small firms are the most vulnerable and urgently in need of assistance to provide or retain health cover for employees. 

We assist US small businesses with our Local Search facility on our US Business Directory which delivers qualified prospects to them without cost.

Most of the 10 million firms listed on our directory are small businesses. 

Monte Huebsch, CEO