An unhealthy situation....

Rising costs prompting small businesses to drop health insurance benefits

According to a new report by the Illinois Main Street Alliance, 12 percent of nearly 500 small businesses polled in a dozen states have dropped coverage for their workers within the past two years. In addition, 35 percent reported switching within the past two years to insurance that covers fewer services.

Average rate increases for 2009 for most large employers are projected to be from 7 percent to just below 10 percent, according to benefits consulting firm Mercer. An individual renewing or purchasing products in the open market can expect premiums to increase by at least 10 percent, Mercer said.