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.
businesses that offer health insurance provide employees with just
one health plan option.
SOURCE: The Kaiser Family Foundation, "National Survey of Small Businesses"
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."
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Joshua Kurlantzick covers trade and international economics for U.S. News and World Report
- Consumers Union
1666 Connecticut Ave. N.W., Washington, DC 20009-1039, www.consumersunion.org
- Fazio International Ltd.
- Hatch Furniture
(605) 665-4416, www.hatchfurniture.com
- Hewitt Associates
- 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
- Patricia Halo
- S-F Analytical Laboratories
(414) 475-6700, www.sflabs.com
- Towers Perrin
100 Summit Lake Dr., Valhalla, NY 10595, www.towers.com/towers
- Visual Edge Imaging Studios
819 Factory Rd., Ste. C, Dayton, OH 45434, www.visualedgeimaging.com