Health insurance big cost for small businesses

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BY SUSAN ERLER
serler@nwitimes.com
219.548.4349 | Thursday, April 24, 2008 | (1 comment(s))

Workers at Hammond-based Staff Source gave up fast food in favor of taking a lunch time walk this spring as part of the temporary staffing agency's wellness program.

The company put together a little more than $3,000 in prizes to help motivate participation by 11 full-time administrative workers and Staff Source's co-owners.

"We're all in it," said Mirko Marich, who co-founded the company 10 years ago with Milan Kesic.

The company hopes encouraging a healthier lifestyle for its workers will help hold the line on employee health insurance costs.

"All of our full-time, permanent administrative staff has health insurance," Marich said. "And the prices certainly have been escalating."

Small business owners surveyed last year by the National Federation of Independent Businesses, a small-business advocacy group, identified cost as the top health care issue.

Cost is the largest deterrent to businesses seeking health care coverage for workers, said Joshua Lybolt, regional director of the Small Business Development Center of Northwest Indiana, a government-funded agency that offers free consulting to small businesses and business start-ups.

"It's very cost prohibitive," Lybolt said.

Generally, "small business owners have struggled in recent years," said Chad Moutray, chief economist and director of economic research for the U.S. Small Business Administration Office of Advocacy.

Double-digit increase in premiums since the beginning of the decade have made them much more difficult to afford, Moutray said, resulting in fewer small businesses participating.

In 2008, 38 percent of companies surveyed by the National Small Business Association were offering a health benefit, down from 51 percent in 2000.

Small businesses typically pay about 18 percent more in premiums for the same benefits as large employers, National Federation of Independent Businesses spokeswoman Stephanie Cathcart said.

Large employers are able to choose from a wider array of health coverage packages for their larger pool of workers, Cathcart said.

"Small businesses bear the burden," she said.

The most common ways employers contain costs are to reduce benefits or pass more of the costs on to employees, the United Benefit Advisors, an employee benefits advocacy group, said in a report on its 2008 Employer Opinion Survey released this month.

However, wellness programs, which include health risk assessments, are emerging as an effective cost-cutting strategy, the report said.

They help employees identify potential hidden health risks and get treatment before they become long-term problems, said Bill Stafford, United Benefit director of health plan management.

Wellness programs are "a way of helping to educate employees about getting as healthy as they can be, and keeping that are already healthy, healthy," Stafford said.

The United Benefits Advisors Annual Benchmark Survey shows the average annual health plan cost is $6,081 per employee.

Source: United Benefits Advisors

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lulu wrote on Apr 24, 2008 12:49 AM:

" For me to be insured thru my work it would cost about $800 a month. If I wanted both my son and I covered it would cost me nearly $1600. This is all fine and well except I only make about $1100 a month working full time. This would fit in perfectly with the above story except that the Lake Central School Corp isn't a small business. "

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