Businesses feeling crunched

Small businesses in the local area are feeling the burden of expensive employee health insurance.

The fear for many companies and employees is that eventually it will become more practical to simply cut health insurance out of their staff expenses.

""Health insurance provides a significant chunk of expenses" particularly for small businesses trying to stay afloat" said Dub Gulley, the director of the Small Business Center Network for North Carolina.

Already, Gulley estimated that about a third of the Triangle's small businesses have cut health insurance. He said providing health insurance for employees has been a latent problem for businesses for decades.

But with the current economic recession, companies are now finding it necessary to make larger cuts from more areas of the their expenses in order to compensate for the cost of health insurance plans.

It's been a difficult year for small businesses. Just look at Franklin Street and the amount of businesses that haven't made it in the past year"" he said.

Gulley explained that businesses are unwilling to make cuts in marketing or staff because both areas bring in revenue. Health care is the next greatest expense for many businesses.

Gov. Bev Perdue recently announced her desire to help small businesses at the National Federation of Independent Business Small Business Day at the Capitol, in the wake of her forum on health insurance at request of the White House a month ago.

The only way to significantly combat rising costs is for the federal government to reform the health care financing system"" Perdue said at the event.

At the conference she added that she plans to continue pushing for a more regulated health care system.

Patty Briguglio, president and chief executive officer of MMI Associates, a small public relations firm based in Raleigh, said she supported Perdue's efforts to help small businesses.

Thus far, Briguglio has not had to make any cuts to her staff's health insurance.

I have been very impressed with Perdue's stance with regard to helping small businesses"" Briguglio said. Health care is the most onerous expense for small business people.""

But Jim Anthony" chief executive officer for Anthony & Co. a development and consulting business in the Triangle said he didn't believe that more regulations and laws were the way forward but wants health insurance to be an affordable personal expense" so people are free to move between jobs.

""Of course I think some sort of reform is necessary" but I don't want the government running the health care system anymore" he said. We'll probably have to make cuts in the future. We may have to raise the deductible so that the employee pays more.""

But Gulley maintained that federal health insurance is more secure"" even though it still requires a revamp in services.

""What needs to happen is for the government to find a way to rein in costs but also provide a better service" he said.

It's no different than before in that people aren't getting the service for what they're paying. It's just that now" it's a lot more difficult to pay it at all.""



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