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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Imagination Branding | Nashville, TN
Tennessee advertising specialty company:
Rising health premiums cost jobs
Chris and Becky Link
Imagination Branding
Nashville, Tennessee
Founded: 1990
Employees: 33
Health coverage: PPO
Layoffs could have been less severe if not for high health bills
By the time the national economic recession deepened in early 2009, Chris and Becky Link found the demand for their advertising specialty services dropped by more than a third. In response, they had to lay off about half of their administrative staff, bringing their 52-person team down to 33. It was a tough move to make for the couple and their business partners, who believe that investing in long-term relationships with their employees translates into stronger ties with customers.
Particularly difficult was knowing that some of those jobs could have been saved if it weren't for the skyrocketing health insurance premiums that Imagination Branding was paying. "If it wasn't so expensive I'd have been tempted to hang on a little longer" before cutting all of those jobs, says Chris Link.
Like many small businesses, the Links tried everything over the years to find affordable coverage that would still be useful for their employees. Every year they got quotes from a different insurance company, but they still faced double-digit percent rate hikes. One year they tried putting everyone on health savings accounts paired with high-deductible insurance, but found the coverage too complicated for people to manage.
Our people have a good hunk of their pay taken out for insurance and when they go to the doctor they still have a high deductible and copays."
Employees paying more out of pocket
Imagination Branding has used solid health coverage as a way to recruit good employees, particularly the salespeople they rely on to grow the business. "Healthcare was always something that helped in the interview, when I told folks we would pay all of their premium," says Link. That changed in 2008 when single individuals had to start contributing to the premium. "Over the past six years premiums have gone up and what you get for it is less," he explains. "So our people have a good hunk of their pay taken out for insurance and when they go to the doctor they still have a high deductible and copays they have to meet."
Chris, Becky and their partners feel strongly that providing health insurance is an essential part of being responsible employers. "We have folks who have been with us for 12 or 15 years, and we can't suddenly yank the insurance out from under them," Chris says. "They would really be in a tough spot."
"We don't have time to be insurance experts."
Reform should include protection for consumers
The Links worry about the people they have had to lay off and wonder what they will do for health coverage. It would be better if there were a safety net for them, an affordable plan they could get access to, says Chris. "I wish there was a good public option," he says.
Additional oversight of the insurance and medical sectors would also help, he believes, because the healthcare marketplace has become so unfriendly to consumers. And he'd like to see the system easier to navigate for small business owners. "We don't have time to be insurance experts," he notes.
For Chris, it's not a matter of ideology. "I've got friends from all points of the political spectrum and they all feel it's a problem. It's a business issue, not a political issue, when you continue to fund this kind of expense."
