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The percentage of companies offering health insurance dropped to approximately 60 percent in 2004, down 3 percent from the previous year. Most U.S. companies that do not offer health care benefits cite rising costs as the determining factor. On average, health insurance premiums rise between 9 and 11 percent or more on an annual basis. The result is a slow but steady decline in the availability of traditional employment-based health care coverage.

The majority of businesses who dropped health insurance coverage have less than 100 employees. 98 percent of larger companies with 100 or more employees offer health care benefits.

The cost of health insurance was the deciding factor for most companies, with some businesses reporting that they had to few employees to negotiate with insurance companies for lower rates. The increasing competition from businesses in foreign countries has forced some U.S. companies to eliminate traditional health care coverage in favor of limited health care benefits for employees. Employers have been forced to pass more of the cost of health insurance coverage on to employees, with the smaller companies being unable to afford coverage at all.

It is estimated that insurance premiums rose this year by an average of 9.2 percent nationwide.

Mike Bell is the webmaster of http://www.InsuranceOptionsGuide.com, a resource for life and health insurance answers.

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