Insurance challenging for small businesses

first_imgNEW YORK – At businesses across the country, health care costs get an added focus in the last months of the year. Companies that offer their workers a variety of health insurance choices hold open-enrollment periods, allowing employees to change their benefits or sign up for special savings accounts. And at many small businesses, owners are deciding what, if any, coverage they can afford for their employees. Amy Falk, who owns a public relations firm in New York, is in the market for health insurance for the first time. She’s always had coverage through her husband’s employer, but now that he’s starting his own business, Falk is shopping for a plan for herself and her one employee. “It’s a challenge,” Falk, said adding that at this point, she doesn’t know whether she needs to budget $800 a month or $1,500 a month for a plan. One of the big questions for Falk is whether to choose a plan with a health savings account, or HSA – a type of insurance that, because of its lower premiums, is intended to be more affordable for small businesses. HSAs have high deductibles, but employees are able to set aside preset amounts of up to $2,650 individually or $5,250 for their families in tax-free accounts to pay out of pocket medical expenses. Employers can also contribute to the accounts. Health care costs have been cited as the biggest financial problem facing small businesses over the past decade. With prices for energy and raw materials climbing and interest rates also higher, the price of health coverage is now even more of a concern. Owners who provide health benefits consider the expense to be an investment in their employees and their companies. “It was a tough sacrifice to be paying,” said Jon Lieb, owner of Thirty Ink Media, a New York-based public relations firm. But, he said, “as a small business owner, I think it’s important to be as competitive as possible with larger P.R. companies. I feel my employees are talented and an asset to my company.” Lieb said he feared that not offering insurance would make it harder to retain employees. He has two workers, both hired this year. Dave Morgan, CEO of TACODA, a New York-based advertising firm, calls providing health benefits “an easy decision to make.” Morgan has a staff of 40 people, and is expanding his coverage to include better dental benefits. He’s found that insurance providers have come up with excellent plans for small businesses, although they are, of course, more expensive per employee than coverage at larger employers. “If you’re willing to bear the cost, you can offer better benefits than the big companies,” Morgan said. Finding health insurance can be a daunting process, and one that is time-consuming and possibly confusing, given the variety of plans and choices within the plans: HSAs, health maintenance organizations, preferred provider organizations and more. Business owners should approach getting insurance in the same way they’d look for a lawyer or accountant – don’t just go to the phone book or online and pick out a name. If you decide to use a broker, get a referral from someone you know, maybe even a couple of referrals. You can also contact a trade or industry group you belong to; many offer group plans you might want to join. Falk, who plans to meet with a broker in the next week, said, “I did some due diligence and made some calls” to find a broker who was highly recommended by friends. Before you speak to any broker or insurance provider, it’s a good idea to give yourself some grounding about what’s available. The Internet is an excellent source for information, but be aware as you browse the different sites that many are trying to sell insurance. Also, the kind of insurance you can get might depend on the state where you live. The National Federation of Independent Business’ Web site has two series of articles on health insurance and health savings accounts. You can access them at www.nfib.com/page/insurance.html. The NFIB provides insurance to its members, and while the articles contain links to its insurance partners, the articles don’t endorse a particular plan or product. The CCH Business Owner’s Toolkit site, www.toolkit.cch.com/text/P05(underscore)4428.asp, also details different kinds of insurance and how to negotiate a contract. Some state governments also offer primers on health insurance for small business owners. Web sites for individual insurance providers and brokers as well as human resource firms often have information about the types of insurance, but again, these sites are sales vehicles for their products, which may or may not be right for you. When you do start shopping, Lieb advised, be pushy. Ask lots of questions. “It’s very important to understand what the parameters are of an individual plan. Know what you’re getting because it can be confusing,” he said. AD Quality Auto 360p 720p 1080p Top articles1/5READ MOREWalnut’s Malik Khouzam voted Southern California Boys Athlete of the Week160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set!last_img read more