Like many small-business owners, Patrick Au wants to be an employer of choice, treating employees fairly. But it's tougher to do that when health-care costs are eating up a larger and larger share of his overhead expenses, forcing him to dump more of the burden onto his workers.

At the turn of the millennium, he says, the employer share of health insurance costs were about 10 percent of his total overhead. Now the costs have increased by a factor of 1.5, to 15 percent of his overhead.

"The cost," he said, "has been skyrocketing."

The owner of Pittsburgh Engineering Consultants was one of several local small-business owners to convene at the Allegheny County Courthouse yesterday, telling their stories of financial strain to Joel Ario, acting commissioner of Pennsylvania's Insurance Department.

Health insurance costs increase annually for just about everybody, both employers and employees, but small businesses can be especially vulnerable to price fluctuations since they don't have the luxury of spreading the health risks across a larger pool of policyholders. One major illness can trigger a big leap in insurance costs.

That's doubly true in Pennsylvania. Many states have passed reforms that force insurers to use a community-based risk pooling model, rather than evaluating the policy risk on a business-by-business basis.

But Pennsylvania, along with Hawaii and Washington, D.C., has yet to pass legislation that prohibits the "cherry-picking" of healthy work forces, which could mitigate the large variations in premium rates.

That's why the small businesses want Pennsylvania's Legislature and Insurance Department to come up with new regulations that would, among other changes, standardize some of the insurance packages offered to small businesses to make price-shopping easier, and replace the practice of "cherry-picking," which allows insurers to weed out the biggest health risks.

In other words, they wanted to be treated like bigger businesses. If that doesn't happen, said Mr. Ario, "We'll be a fragmented, small-group market," with insurers offering better rates to younger, healthier companies, forcing older, smaller companies to pick up the load.

Eileen Anderson, vice president of Red Clay Tile Works in Bellevue, is a self-styled health-care activist, a member of the SMC Business Councils who sat on the board of directors of Suburban General Hospital.

Because small companies are offered such expensive products, at one time she was carrying a $10,000 deductible. Still, her premiums would jump by double digits year after year. Last year, she said, she spent $18,000 on premiums and the deductible.

Among the small-group health insurance reforms being touted by the Rendell administration, one would prohibit discrimination based on age, gender and prior health history, known as medical underwriting. "Medical underwriting has been the biggest bane of our existence," said Ms. Anderson, whose premiums jumped 40 percent the year she turned 55.

Another reform would allow parents to keep children on their insurance plans until age 29, if the child can't find his own coverage. "Having young and healthy people in the marketplace is important," because it dilutes claims and spreads the risk, Mr. Ario said.