The 2004 increase was less than last year's 13.9 percent spike — still it was the fourth straight annual double-digit rate hike, according to the annual employer health-benefits survey by the Henry J. Kaiser Family Foundation and the Health Research and Education Trust.

Employer payments for health insurance rose five times faster than the rate of inflation and workers' earnings.

A growing number of businesses have dropped health coverage for their workers completely, the study noted.

"Health insurance is becoming unaffordable, especially for small employers," Drew Altman, Kaiser Family Foundation president, told the Associated Press. "We should expect the ranks of uninsured to grow as small employers can't afford health insurance."