But many business owners or company managers don’t need statistics to tell them: Things are going from bad to worse.

“Our rates went up 84 percent this year. We had to change carriers to be able to manage it,” says Julie Tappero, owner and president of West Sound Workforce. “I couldn’t afford that as an employer, and my employees couldn’t afford it either.”

West Sound Workforce is a typical small company. The staffing agency has about 15 employees, with six of them opting for health care coverage. It also offers insurance to its temp workers, who pay their own premiums. In addition to being a small company that doesn’t have the buying power of a big corporation, WSW has an aging workforce. “The majority of us who participate are a mature group - they (the insurance companies) are punishing me for a mature workforce,” Tappero says. “We’re a healthy group, watching our health and weight, working out (etc)... but they rate you as an age group.”

Tappero was able to shop around to find another carrier that allowed her to keep the coverage relatively the same. Even so, she said the company may have to cut other benefits to be able to manage rising costs of doing business.

“What we’re seeing is that more employers are not offering health care (coverage) to their workers - it’s a benefit they have to give up,” she says.

Ty Taber, sales and marketing director for Bremerton-based KPS Health Plans, says bigger employers are not impacted as much, but smaller companies with less than 50 employees are exploring various alternatives. “Their first reaction is, if the price reaches a certain threshold, they don’t offer benefits anymore,” he says. “We don’t see a lot of that, but it does happen... Price is absolutely the driver for smaller employers.”

Other ways companies are addressing the increases is by passing them along to employees, or paying the same and reducing coverage. “Some employers are taking the approach to be innovative - looking more at wellness and prevention,... alternative plans with Health Savings Accounts or Health Reimbursement Accounts,” he says. For example, KPS has been offering HSAs for about two years, and has about 4,000 members in those plans. (An HSA, an option that became available on the market in the last few years, combines a high-deductible policy with a tax-free savings account used for medical expenses; the plan appeals mostly to younger, healthy employees.)

Just in the last five years, the cumulative growth in health insurance premiums was a whopping 78 percent, according to the Kaiser Family Foundation - far outpacing inflation (17 percent cumulative increase) or wage growth (19 percent cumulative increase between 2002 and ‘07).

Bigger companies, while not as severely affected as small ones, have also seen double-digit rate increased in the last few years, with average hikes at 9-20 percent for renewals. Marilyn Hoppen, HR director for Kitsap Bank, says her company has seen about 3-13 percent rate increase. Kitsap Bank has 275 employees, with about 65 percent participating in health insurance coverage.

“There is no question health care is becoming expensive, but it seems to have settled down a bit,” she says. “Everyone’s affected by premium increases. We try to be heavy shoppers for coverage.”

Kitsap Bank, too, added a new HSA plan in 2008, and helps fund the savings account. The company is also focusing on wellness programs, offering a variety of benefits such as free (confidential) risk assessments and corporate membership to the YMCA. “I think a lot of employers are focusing more on wellness” as a way to keep policy usage down, she says.

Sharon Tucker, HR manager at Kitsap Credit Union who is the Southwest District director for the Washington State Council of the Society for Human Resource Management, says focus on wellness is a growing trend among employers. “Medical insurance programs use your experience ranking (the number of claims). The better your experience rankings are, the better it is for the bottom line,” she says. For employers, offering wellness services translates not only in better premiums, but in increased productivity, injury prevention and decrease in absenteeism, she says.

According to human resource professionals, health coverage remains among the top recruitment and retention tools of employees, who look not only for availability of coverage but also for quality (for example, which services are covered).

“People will stay longer (with a company) if they have good benefits, even if their pay is not as good,” Tucker says. “Health coverage is very big. People are looking at what benefits a company offers when they start or change a career. They look at what it’s going to cost them,” she says. “So employers are looking for ways to make it more affordable.”

Hoppen notes that medical coverage “plays a factor in making Kitsap Bank an employer of choice,” and the company provides annual statements to workers showing the value of their benefits. She thinks coverage will continue to be an important tool for recruitment and retention.

With that, however, the challenge is likely to grow both for companies and their workers. As the workforce continues to age, small companies like West Sound Workforce will be faced with a growing dilemma of how to balance costs and retention/recruitment.

“From the job seekers’ perspective, it’s the primary benefit they want,” Tappero says, adding that the fact that premiums are affected by age is a “built-in discrimination tool against mature workers” because “employers know if they put an older person on their group health, rates go up a lot.”

“It’s in such a crisis state,” she says. “I encourage people to offer solutions to their legislators. It will take a lot of brilliant minds to solve this.”