Health Costs

As Congress wrestles with health care, no one has more at stake than employers. Firms pay a huge share of health costs. About 63% of employers offer health insurance and pay more than 75% of their workers' premiums. Built into those premiums are the medical costs of the uninsured who can't pay for health care. Plus employers get taxed to help finance Medicare.

Details of an overhaul remain in flux. But the key elements are emerging, and it's clear that firms face hundreds of changes. Among them:

• An insurance exchange. At the very heart of most plans is a "marketplace" where companies and individuals can buy coverage. More competition is the goal, with added options and lower premiums. Small businesses would gain the most from this because they would get more power to bargain over prices.
• Employer mandates. A real sticking point - with liberal Democrats insisting on "play or pay" rules for all but the smallest of businesses. Other Democrats and the few Republicans involved in the negotiations prefer incentives to spur employers to offer coverage. Odds favor a mandate but with smaller penalties than the proposed $750 per worker.
• Less flexibility. A government mandate will include minimum requirements for what counts as coverage, giving businesses less discretion to craft their policies.

The bottom line is that some businesses will benefit and others will pay more. Many will go along if they are convinced the bill will bring down costs in the long term. They know it will be expensive, but they also feel the current system is unsustainable.