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The majority of small businesses offer some type of health insurance to their employees, but many are having second thoughts.
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At present, 58% of small businesses have health insurance, and of those that offer plans, 56% pay for at least 80% of the overall cost of their workers' health care, according to a survey by SurePayroll, a Chicago-based online pay service provider for small firms.

But 11% of the small-business owners who currently offer benefits are considering dropping the plans next year, the survey says, depending on the costs of coverage in the second half of this year.

"If you think that we've got health-insurance issues now, imagine if 350,000 small businesses stopped offering health insurance in 2007," says Michael Alter, president of SurePayroll. "The alarm of small-business health care has been sounding for quite a while. We cannot continue to ignore this problem," he adds.

Of the plans now offered by small businesses, according to the poll, preferred-provider organizations (PPOs) are most popular, offered by 62% of those firms with benefits. Health-maintenance organizations (HMOs) are provided by 18%, while a combination of PPOs and HMOs are provided by 20%.

Of the small firms that currently have no benefits, 44% have no plans to change, but 46% surveyed indicated some interest in health care, dependent upon cost.

Write to Richard Breeden at richard.breeden@wsj.com.

Copyright (c) 2006. Wall Street Journal.