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Healthcare costs squeeze employers

Posted On Mon, November 22, 2010

Rising healthcare costs are having negative effects on some companies. Many employers can't afford to absorb the higher costs, so they are passing the expenses onto employees.

A study released by the New York State Health Foundation reveals that premiums rose more than 7 percent last year, with 66 percent of firms in the state saying that paying for health insurance is difficult. Some have even indicated they have refrained from hiring due to healthcare costs.

Senior fellow at the National Opinion Research Center Jon Gabel says benefits reflect what is going on in the larger economy.

"During periods of high unemployment, it's not unusual for employers to cut back on benefits, reduce the generosity of coverage, or expect workers to absorb higher costs," says Gabel. "New York's situation may get worse before it gets better, given the pace of the economic recovery."

For much of the past 18 months, the unemployment rate has hovered around 10 percent nationwide. The government has made several efforts to infuse money and jobs into the economy, but growth has remained small and sluggish.

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