Health Insurance Costs: A 'Critical' Problem for Small Business Concerns Over Health-Care Costs Ranks Highest Ever in New NFIB/Wells Fargo Survey SAN FRANCISCO, May 25 /PRNewswire-FirstCall/ -- Health insurance, liability insurance and workers' compensation are the top three problems facing America's small-business owners, according to a comprehensive study released today by the NFIB Research Foundation and Wells Fargo. The sixth edition of Small-Business Problems & Priorities, co-sponsored by NFIB and Wells Fargo, measures which aspects of running a business are most problematic for small-business owners. While "health-care costs" retained the same top ranking that it has held since 1986, the number of respondents citing the issue as "critical" (the most severe rating possible), spiked dramatically. In 2000, 47 percent of those surveyed cited health-care costs as a "critical" problem. In 2004, two-thirds of respondents listed health-care costs as a "critical" problem, an 18 percentage-point increase over a four-year period. "While there might be some disagreement amongst small-business owners about many problems, the cost of health care is a critical concern that is prevalent across all regions, industries and businesses of all ages," said Foundation Senior Research Fellow Bruce D. Phillips. "Regardless of whether the business currently offers insurance and is worried about increased costs, or the business wants to offer health insurance but can't afford it, the increasing cost of health care is having a significant effect on small-business owners. No other single problem can touch health-care costs in terms of either the unanimity or intensity of concern it generates among small-business owners." "While small-business owners are gradually becoming more confident as the economy strengthens, these survey results illustrate there are still some very real concerns," said Rebecca Macieira-Kaufmann, small business segment manager for Wells Fargo. "Today's small-business owners are balancing longstanding systemic issues like health care with newer concerns like identify theft. This reflects just how challenging the economic landscape can be, and underlines why it is so important that we continue investing in research and solutions to better understand the issues confronted by small-business owners and how to help address them." Five of the top 10 problems worrying small-business owners appeared in the "costs" cluster. In addition to health insurance, these included the cost and availability of liability insurance, workers' compensation costs, energy costs (natural gas, gasoline, propane diesel and fuel oil) and electricity rates. While health care was a unifying concern across the board, many problems facing small-business owners differed based upon geographic region and industry. For example, the ability to "cost-effectively advertise" ranked 24th overall but ranked higher for firms in the finance and trade industries, and for those owners who sell to one or two firms. Likewise, small-business owners are less concerned about so-called "hot button" political issues receiving greater attention this political season. Small-business owners cited "exporting my products/services" and "competition from imported goods," as the tenth and sixth least severe problems on the survey. "This year's list makes it pretty clear that many of small-business owners' most serious problems are politically generated, rather than spawned from free-market competition," Phillips noted. "Small-business owners consider the daily burdens of health-care costs, taxation and regulation far more difficult to deal with than what candidates are discussing on the evening news. Their most vexing challenges are worries about unfunded and unnecessary mandates that stifle growth and keep small businesses from doing what they do best -- moving our economy forward." The latest Small-Business Problems & Priorities report is based on responses to a mail survey circulated in the first three months of this year. Responses were collected from 4,603 small-business owners nationwide. Respondents rated each of 75 possible business problems on a scale of 1 to 7, with 1 indicating a "critical" problem and 7 indicating "not a problem." Problems are ranked according to the average rating received. Respondent information was broken down by a number of different variables including industry sector, geography, number of employees, annual sales change over the last three years, and number of years in ownership. Copies of the survey are available to members of the media upon request. For more information about the latest Small-Business Problems & Priorities, contact NFIB media department at 202-554-9000. The National Federation of Independent Business (NFIB) is the nation's largest small-business advocacy group. A nonprofit, nonpartisan organization founded in 1943, NFIB represents the consensus views of its 600,000 members in Washington and all 50 state capitals. For more information on NFIB visit http://www.nfib.com/. NFIB's 2004 National Small Business Summit will be held June 16-18 in Washington, D.C. More information is available on-line at http://www.nfib.com/summit. Wells Fargo & Company is a diversified financial services company with $397 billion in assets, providing banking, insurance, investments, mortgage and consumer finance from more than 5,900 stores and the Internet (wellsfargo.com) across North America and elsewhere internationally. Wells Fargo Bank, N.A. is the only "Aaa"-rated bank in the United States. Visit Wells Fargo at http://www.wellsfargo.com/ Providing financial products and services to more than one million businesses with annual sales up to $20 million in all 50 states, Puerto Rico and Canada, Wells Fargo is the #1 lender to small businesses in the United States in total dollar volume according to 2001 CRA data. The second largest SBA lender in dollars, and third largest in loans, Wells Fargo is an SBA Preferred Lender in 28 states, and originated 3,181 loans for $473 million in 2003. Wells Fargo has also been ranked the number one SBA 504 lender nationally for the last two years. Speer & Associates rated Wells Fargo's online services #1 for small business and for consumers (2003). Its targeted business services programs provide outreach and education to women, African American, Latino, and Asian business owners about financial services. Since 1995, Wells Fargo has loaned more than $20 billion to women and minority business owners. DATASOURCE: Wells Fargo & Company CONTACT: Angela Jones, +1-202-554-9000, or Matthew Hurwitz, +1-415-222-1679 Web site: http://www.nfib.com/ Web site: http://www.wellsfargo.com/

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