For the past eight years, Shaun Spotwood didn't have to worry about health insurance. His employer, Sierra Valley Moving and Storage, provided the benefit free of charge.

But business hasn't been as robust as it used to be, and the Natomas company, like so many others, is faced with tough choices as it looks to trim expenses. For the first time, the small firm may ask its 18 employees to shoulder some of the burden it pays for providing health insurance.

"I know how it is out there. I know how slow it is," Spotwood, 35, said on a recent morning in the company's warehouse. Keeping an eye on the bottom line "is something they have to do, and I can understand that. Of course, I worry about it because that's more money being taken out of my paycheck."

Amid financial upheaval across the U.S. economy, businesses large and small are being buffeted by the high cost of doing business. Benefits are often the first to be hit when business owners go looking to cut expenses.

As health insurance premiums continue rising, companies are shifting more of the cost burden to their employees, according to the Kaiser Family Foundation and the Health Research and Educational Trust.

The trend is sure to continue – as many employees will undoubtedly discover during open enrollment, the year-end decision-making ritual that forces workers to take stock of their health insurance needs.

On average, annual premiums are 5 percent higher this year than last, according to the Kaiser study, released late last month. Over the past decade, premiums have more than doubled.

Meanwhile, employees' share of costs has also risen. The average yearly contribution is now $721 – out of $4,704 in costs – for an employee without dependents. For family coverage, an employee's contribution averages $3,354. The increases have rapidly outpaced workers' earnings.

Companies aren't required to provide health insurance in the United States, although 60 percent do, according to studies. Yet the debate about mandatory health insurance continues nonstop.

Gov. Arnold Schwarzenegger's push for mandatory health insurance has so far failed to win support. About 6.7 million Californians are medically uninsured.

In San Francisco, the 9th U.S. Circuit Court of Appeals recently rejected a challenge from restaurateurs seeking to strike down a San Francisco ordinance requiring companies with at least 20 employees to provide health coverage.

Sierra Valley, which spends more than $25,000 a year on health insurance, has never asked its employees to share the cost. But it's time to "bear down and cut expenses," said Paul Stokes, the company's general manager. "We're always constantly looking for ways to reduce costs. There's so many little pieces."

For a small company like Sierra Valley, which has annual revenues of about $1.3 million, offering health benefits means emphasizing the need for a healthier work force, particularly in the moving business, where workers are under considerable physical strain.

The company won't eliminate its insurance program. "I wouldn't want that to happen to me," Stokes said. Still, passing on some of the cost to employees has become an economic reality.

"If I don't know how it would affect them, I'd be naive," Stokes said. "We're a small company. A lot of our employees have been with us for a long time. I know these guys' wives and children."

Despite higher costs, few companies appear willing to drop health coverage, said Bianca DiJulio, a senior policy analyst with the Kaiser foundation and one of the study's authors. "Health benefits are useful in recruiting and retaining employees."

The Kaiser study says a push to higher deductibles is most pronounced in smaller firms – those with fewer than 200 employees – where at least a third of workers have deductibles of at least $1,000. That means more out-of-pocket expenses before the insurance kicks in.

According to another Kaiser study, about a fifth of Californians do not have medical insurance.

Earlier this year, Sally Fiske and two dozen others at a local consulting firm faced losing their jobs – and their health insurance. Fiske talked her bosses into dramatically cutting hours instead of cutting the jobs.

"I asked if they were open to hearing my idea. Yes, the goal was to bring down expenses, because the company needed to survive. But instead of wiping people out, I asked them to look at other options," said Fiske, 58, the company's human resources manager.

"The idea of not having a job is big, but so is not having health insurance. For me, it's a big sting."

The result was a package of options: Reduce hours and keep the job and benefits. "Most opted to keep their jobs and benefits," Fiske said.

The company, which Fiske asked not be named, continued to foot the entire bill for premiums, she said.

Fiske dropped from full-time work to 10 hours per week – but kept her health benefits. But to make up the lost pay, she had to find another job, one that didn't come with health benefits.

Sheryl Carlson, an Elk Grove health insurance broker, says fewer companies continue to shoulder the cost of health premiums.

"I'm not seeing a lot of employers dropping health insurance – and those who aren't offering it are still not offering it – but they're looking for more alternatives," she said.

That means offering insurance plans whose premiums may cost less but whose out-of-pocket requirements are higher.

"The hardest thing about my job is educating the employer and employee – to keep the insurance, first of all, and maybe help them find a happy middle ground," she said.

Call The Bee's Bobby Caina Calvan, (916) 321-1067.