Local News

Survey: Employee health care hurting small businesses

Posted July 21, 2009 6:55 p.m. EDT
Updated July 22, 2009 8:50 a.m. EDT

— Nice Price Books in Carrboro prides itself on selling used books at a discounted price, but owner Cindy Kamoroff says when it comes to health insurance for her staff, she hasn't found any bargains.

"My health insurance for three healthy people is more than my mortgage," Kamoroff said Tuesday.

Because of that, Kamoroff said she is not hiring any more full-time workers and cannot offer benefits to part-time employees.

"It strangles my son's college savings. It strangles any improvements to my home," Kamoroff said. "We can't travel. We can't expand our business in any way, because we can't afford it."

Kamoroff isn't alone, according to the North Carolina Public Interest Research Group, a nonprofit, public interest advocacy organization.

In North Carolina, 20 percent of companies with 10 employees or fewer offer health insurance; 77 percent of businesses in the state are small businesses.

In a recent survey of 343 small-business owners and managers, the group found that the costs and administrative hassles associated with offering insurance weigh heavily on small businesses.

It found that 55 percent of small businesses value health insurance as a key to business success because it allows them to attract skilled workers. Seventy-eight percent who are not offering coverage would like to do so.

"A public health insurance option that competes with private companies and could potentially decrease the cost that these insurance companies are charging individuals and small businesses – we think could be a very good change," said Aubrey Hamilton, a staff member for North Carolina Public Interest Research Group’s health care campaign.

The North Carolina Chamber of Commerce says its approximately 35,000 members largely disagree, saying a government option, like the one proposed by President Barack Obama, could actually cost more.

"Among the big funders of a government-run plan would be a high tax on high-wage earners," said Lew Ebert, the chamber's president and chief executive officer. "Many times, people forget those are small-business owners."

Ebert said that could ultimately mean fewer jobs and that right now, there are too many questions to rush into a decision.

"The government-run plan brings uncertainty to all aspects of the market," he said.

Obama has insisted that legislation reinventing the nation's $2.4 trillion health care system be in place before Congress recesses in August, but the plan has drawn sharp criticism from Republicans and some Democrats that it is too expensive.

The bill before the U.S. House of Representatives would, for the first time, require all individuals to have health insurance and all employers to provide it.

Under the proposal, the poor would get subsidies to buy insurance and insurers would be barred from denying coverage based on pre-existing conditions. The bill also would raise taxes on the wealthiest Americans, the top 1.2 percent of earners.

The president is scheduled to address the nation on the matter Wednesday at 8 p.m. Watch the address live on WRAL.com or on WRAL-TV.