Small Businesses Anticipate Big Health Insurance Cost Increase, Survey Finds

The health care reform package passed by Congress in March has businesses scurrying to figure out how the legislation will impact their bottom lines and what to do about it.

Small businesses are particularly fearful of short-term health care cost increases resulting from the health care reform legislation, according to a new survey by Fidelity Investments.

The survey of 459 employers , released Friday, found 49 percent of employers with 500 or fewer employees — generally considered the definition of small business — anticipated significant increases in health care costs over the short term. This compared to 25 percent of larger employers with the same expectation.

Among small companies, 22 percent said they were considering no longer offering health care coverage . Only 14 percent of large employers said the same.

But despite skittishness, most employers – 85 percent – felt that health care benefits would continue to be at least as important in attracting and retaining employees, regardless of the reforms. 

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Wynne Parry is a senior writer for LiveScience, a sister site to BusinessNewsDaily.