High Healthcare Costs Big Concern for Small Business Owners

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SurePayroll survey finds many small businesses may stop offering healthcare to employees in 2007.

According to a survey by SurePayroll, the nation’s largest online payroll service provider for small businesses, many small business owners that are currently offering healthcare benefits may not next year.

Based on the survey results, 11% of the small business owners who currently offer healthcare benefits say they may not do so in 2007, depending on how healthcare costs fare in the second half of 2006.

“If you think that we’ve got health insurance issues now, imagine if 350,000 small businesses stopped offering health insurance in 2007,” noted Michael Alter, president of SurePayroll. “The alarm on small business healthcare has been sounding for quite a while, and legislators keep hitting the snooze button. We cannot continue to ignore this problem.”

According to the survey, 58 percent of small businesses currently offer small business health insurance to employees. Of those who offer insurance, 56% pay for at least 80 of the overall cost of their employees’ healthcare.

PPO (Preferred Provider Organization) plans are the most popular, offered by 62% of respondents, while 18% offer HMO (Health Maintenance Organization) plans and 20% offer combination PPO/HMO plans.

Of those who do not offer a healthcare plan now, 44% have no plans to offer healthcare benefits in 2007. 46% of surveyed small business owners who do not offer healthcare benefits, indicate that their interest in offering healthcare benefits in 2007 depends entirely on the costs of healthcare plans.

“If you don’t solve small business healthcare problems, you put a big portion of the overall economy in a precarious position,” commented Alter. “The key here is for legislators to look more aggressively at tax credits for small business healthcare. Furthermore, the delays in legalizing interstate group purchasing of small business health insurance must stop. Finally, there has to be more supply-side cost containment in the healthcare industry because small businesses don’t want to be in the business of working their tails off simply to meet their healthcare costs.”

About SurePayroll’s Commentary

Every month, SurePayroll publishes its small business economic indicators via the SurePayroll Small Business Scorecard. Based on employee and contractor paychecks for over 16,000 small businesses, SurePayroll’s indices give insights on small business hiring, salary levels and reliance on contractors.

SurePayroll regularly augments its data indices with surveys on a variety of topics of interest to small business owners. The July survey was conducted between July 3 and July 12 via email survey with a 90% confidence interval and a 5% error margin.

About SurePayroll:

Privately held SurePayroll is America's fifth largest full-service payroll provider and the nation's largest online full-service payroll provider. Catering exclusively to the needs of small businesses, SurePayroll provides a simple, reliable and economical way to process payroll in minutes via the Internet.

In addition to providing payroll services directly to small business, SurePayroll also provides a private-label payroll service that allows SurePayroll's numerous partners to offer payroll processing to their small business clients. Business partners include ABN AMRO, Pitney Bowes, and MasterCard. SurePayroll will process nearly $3 billion in employee and contractor payroll payments in 2006. For more information, visit http://www.surepayroll.com.

For Media Inquiries Contact:

Ken Gaebler

Walker Sands Communications

Phone: (312) 543-0654

Email: surepayroll-inquiries@walkersands.com


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