WASHINGTON - The percentage of businesses offering health insurance to their workers has declined steadily over the last five years as the cost of providing coverage continues to outpace inflation and wage growth, according to the 2005 Annual Employer Health Benefits Survey released by the Kaiser Family Foundation and Health Research and Educational Trust.

The survey found that three in five firms (60 percent) offered coverage to workers in 2005, down significantly from 69 percent in 2000 and 66 percent in 2003. The drop stems almost entirely from fewer small businesses offering health benefits, as nearly all businesses with 200 or more workers (98 percent) offer such benefits.

According to the survey, premiums increased an average of 9.2 percent in 2005, down from the 11.2 percent average found in 2004. The 2005 increase ended four consecutive years of double-digit increases, but the rate of growth is still more than three times the growth in workers' earnings (2.7 percent) and two-and-a-half times the rate of inflation (3.5 percent). Since 2000, premiums have gone up 73 percent.

The annual premiums for family coverage reached $10,880 in 2005, eclipsing the gross earnings for a full-time minimum-wage worker ($10,712). The average worker paid $2,713 toward premiums for family coverage in 2005 or 26 percent of the total health premium. While workers' share of their premium has been relatively stable over the past few years, they are now paying on average $1,094 more in premiums for family coverage than they did in 2000.

"While premium increases slowed this year, they continue to rise much faster than inflation and other economic indicators. As a result, workers and businesses alike are finding it harder to afford health coverage," said Health Research and Educational Trust President Mary A. Pittman, Dr. P.H.

For the full survey results, visit www.kff.org/insurance/7315/.

Publication date: 09/26/2005