Small firms struggle with rising healthcare costs

Small businesses are increasingly struggling to manage the rising cost of health insurance, it has been reported.

In a Wall Street Journal article, it was claimed that such firms are set to be hit hard by major rises in premiums rate as they head into 2009.

The publication points out that such rises "couldn't come at a worse time", as the overall economic situation weakens and accessing lines of credit becomes more difficult.

Edward Kaplan, national practice leader for employee benefits consultancy Segal Co, says that although health insurers may be able to negotiate with large firms on premium costs, they are "being much more rigid" with smaller businesses.

Dottie Jessup, who owns a number of bicycle shops in Florida, holds an uncertain outlook as premium costs rise.

She told the news provider, "Our concern is that we're getting to the point where we're wondering where this is all heading, because you can only reduce benefits and contain costs so much."

The Wall Street Journal also points to an insurance broker survey carried out by Citigroup which revealed that more respondents believe the rate of price growth is increasing than those who think than are reporting that rises are beginning to slow.

Meanwhile, a recent CNN Money article reported that rising number of small businesses are considering outsourcing as a means of reducing their expenditure.

For those struggling to meet health insurance costs or other expenses, applying for a business loan from a nontraditional lender could prove to be effective.