Small business owners and entrepreneurs throughout the US are facing impossible choices because of the skyrocketing costs of health insurance premiums, and, in many cases, the lack of access to coverage. Here are some of their stories.
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Bookshop Santa Cruz: Santa Cruz, CA
California independent bookstore:
Rising health costs threaten coverage
A family business struggling to provide for employees
Bookshop Santa Cruz has been a mainstay of quirky downtown Santa Cruz since the store's founding in 1966. Like many independent bookstores, the business has been struggling against big chain competition, but its commitment to long-time employees has never faltered.
That's why it's so hard for Casey Coonerty-Protti, who took over the store from her parents in 2006, to have to whittle away at the healthcare benefits employees rely upon.
"Health coverage is incredibly important to our business," she says. "In retail, our wage structure can't be that high. So the offer of healthcare benefits is a huge draw for people to be willing to make the wages they make."
Many of the store's employees are devoted to the place-the manager and two book buyers have worked there more than 30 years. "Having a healthcare plan allows people to have a career here."
Other, younger employees rely on the bookshop's health coverage to get by, patching together a part-time job with benefits at Bookshop Santa Cruz with a second job at a restaurant, so they can boost their income with tips. "That means they work six or seven days a week," Coonerty-Protti says.
"At some point, with costs increasing the way they are, it's going to be a decision whether we offer coverage at all. We can't continue to absorb 10- and 20-percent increases each year."
Continuing premium hikes eat into already tight retail margins
The store's commitment to maintaining healthcare coverage hasn't been easy the last several years. In 2006 health insurance costs went up 26 percent. In 2007, premiums increased by 10 percent, and the store reduced its share of the dental premium from 70 percent to 50 percent.
This year premiums rose 8 percent; the store decreased the portion of the health plan premium it pays from 70 percent to 65 percent, and reduced the amount it pays toward the deductible.
Because only part of the cost increases are passed along to workers, the store also pays more, which is a challenge given the tight margins of independent booksellers. Coonerty-Protti wonders how long that can go on. "It's increasingly more difficult," she says. "At some point, with costs increasing the way they are, it's going to be a decision whether we can provide it at all. We can't continue to keep absorbing 10- to 20-percent increases each year."
"It's a family business and we see our employees as family. I think health coverage is a right and something people deserve to have."
Universal coverage would help business focus on growth
The problem also hurts the bookstore's potential for growth. "It's taking money out of the pockets of our employees and out of the pockets of the store," Coonerty-Protti says. "We're making a tradeoff in terms of giving benefits instead of investing in the store. Premium increases don't allow us to grow and add new jobs."
Coonerty-Protti would welcome healthcare reform that takes the pressure off small businesses like hers. "It's a family business and we see our employees as family," she says. "Healthcare is a right and something people deserve to have. We want to be able to provide it as long as we possibly can, but we also want to keep people's jobs. We have to manage that balance, and it's very hard."