In the face of heavy health care cost increases, some small businesses are paying employees to turn down medical benefits, a compensation consulting firm reports.[@@]
A study by Salary.com, Needham, Mass., finds nearly 90% of businesses with up to 200-plus employees are paying more for basic medical insurance in 2005 than in 2004.
Of 304 companies surveyed, more than 50% reported annual increases of 10% to 20%, while almost 10% reported increases of 30% or more.
To cope, 64% are using such tactics as increasing copayments, raising employees' share of premiums, switching plans, reducing the extent of coverage, tightening eligibility standards or even eliminating coverage altogether.