Through the Roof
Bargain-Hunting
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Despite the grim situation, entrepreneurs are not out of
ammunition in their battle against rising health-care costs. Small
businesses can focus more on preventive care, says Patricia Halo,
author of Managing Health Benefits in Small and Midsized
Organizations. (AMACOM). "As an employer, you have to
create a healthy environment if you hope to reduce chronic and
catastrophic illnesses, which eat up most health-care
dollars," Halo says. Halo recommends offering healthy
breakfasts rather than coffee and doughnuts, holding educational
sessions that teach employees about fitness and banning smoking in
the workplace. "Employers have to be clear that the privilege
of health insurance comes with the responsibility of taking care of
your health," she says. Halo also suggests that small businesses seek out state-funded
health-care subsidies and use "report cards" put out by
organizations like the National Committee for Quality Assurance,
which analyze and compare health plans. "Most small businesses
don't realize that many states pay for some health care for
companies with few employees, or that some of their employees may
be eligible for government programs like Child Health Plus [a New
York children's health insurance program]," Halo says. | 71% | | of small
businesses that offer health insurance provide employees with just
one health plan option. SOURCE: The Kaiser Family Foundation,
"National Survey of Small Businesses" |
Content Continues Below
Ultimately, many business owners believe the best way to keep
health-care costs stable is to join association plans, in which
small-business owners band together to give themselves more power
to negotiate with insurers. Two years ago, Visual Edge Imaging
Studios, a three-person imaging company in Dayton, Ohio, joined an
association plan offered through the Greater Cleveland Growth
Association. "The association plan has been by far the best
option," says Visual Edge co-owner Randy Sowash, 38.
"Under the association plan, our premiums rose by only $8 last
year." As in Ohio, trade associations already organize association
plans in many other states, and in the next two years Congress may
allow national trade groups to sell health insurance to their
members. Halo estimates that a small business could reduce
health-care costs by up to 25 percent by joining an association.
She says: "When you're facing the craziness that is
small-group insurance today, 25 percent could mean an enormous
amount."
| Online Exclusive: Under the Knife | Cut
your health-care costs with these penny-pinching tips.- Hit the
books: Research customized health plans that tailor drug
benefits to small companies' needs, defined-benefit plans, or
insurance agents who only serve the small-group market.
- Put your staff
on a diet: Offer fruit, bottled water and other healthy
items to your work force; allow your employees time to eat lunch
away from their desks so they can manage their stress levels and
enjoy a healthy meal.
- Pass the
buck: To encourage workers' consciousness of health
costs, raise deductibles and co-pays or choose a health plan that
has much lower co-pays for generic drugs.
- Join the
crowd: Research association plans offered in your state.
Because of their size, many association plans are exempt from state
mandates that force insurance providers to pay out more in
coverage.
- Call the
government: Phone your state health insurance office to
see whether your business qualifies for health-care subsidies to
small employers or minority-run businesses.
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Joshua Kurlantzick covers trade and international economics
for U.S. News and World Report Contact Sources - Independent Business Association of Wisconsin
1400 E. Washington Ave., #282, Madison, WI 53703, www.ibaw.com
- National Center for Policy Analysis
12655 N. Central Expwy., #720, Dallas, TX 75243-1739, www.ncpa.org
Originally published in the September 2002 issue of Entrepreneur Magazine
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