The pinch of rising health-care costs has been felt in the land. With the sharp increase expected in health-care premiums -- at least 25% next year, according to many accounts -- small companies are particularly concerned that they may have to switch health plans, according to the 1999 Employer Health Benefits survey just released by the Kaiser Family Foundation.

Twenty-eight percent of the companies with 3 to 199 workers are "very worried" that costs will force them to change plans. That anxiety is shared by 16% of midsize companies (200 to 999 workers), 14% of large companies (1,000 to 4,999 workers), and 7% of companies with 5,000 or more employees. When companies ranging from the midsize to the largest are taken together, the figure is 15%. Overall, 66% of small companies are at least "somewhat worried," while 62% of companies that are midsize or larger fall into that category. Seventy percent of all companies are concerned that they'll have to cut back the scope of benefits.

Small companies aren't as concerned as large ones that they'll have to switch plans because of poor care. A third of companies with 5,000 or more employees say they're "very worried" that they'll have to switch for that reason compared with 8% of small or midsize companies.

By Julia Lichtblau in New York
julia_lichtblau@businessweek.com