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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LinguiSearch | Philadelphia, PA
Pennsylvania market research company:
Unique firm's needs don't fit insurance mold
David Schellenberg
LinguiSearch
Philadelphia, Pennsylvania
Founded: 1999
Employees: 4
Health coverage: High-deductible
Employees in other states removed from health plan
David Schellenberg's company helps businesses fine-tune their marketing strategies through the precise use of language. It's a specialty within a specialty, and it's "almost impossible" to find prospective employees trained in the obscure science of semiotics, he says.
That's why Schellenberg has held onto his three long-term employees even when his health insurer kicked two of them off the health plan because they live in states other than Pennsylvania, where LinguiSearch is based. That's left him paying them to buy their own health benefits, a more expensive option than having everyone on a small group plan. And out of fairness, he feels compelled to give everyone either a health plan subsidy or salary bump equal to the most expensive staff member's plan.
"I swore to myself I would not make the same choices as some of the bad companies I've worked for," says Schellenberg. "Besides, I expect a lot from my people. They're very good at what they do. The last thing I want is for them to worry about how they would pay if something goes wrong with their health."
"The last thing I want is for them to worry about how they would pay if something goes wrong with their health."
High health costs draw dollars from potential hiring
Schellenberg chooses to invest in his staff because their expertise is central to his success. "If they succeed, I succeed," he says. "I can't generate the same income and profit without these people."
Still, the cost of keeping everyone covered or otherwise compensated is a drag on the firm, which could otherwise grow. "Having to come up with that money all the time has caused a huge issue," says Schellenberg. "Instead of having the money in-house and hiring a new person, it's tied up in health insurance."
"Small business owners have everything stacked against us."
Small firms at a disadvantage in insurance marketplace
The Philadelphia entrepreneur believes healthcare reform would offer some relief to small business owners. In particular, Schellenberg wants to see barriers to coverage removed, particularly for people who are older or have had health problems. "The elimination of preexisting condition rules and age rating would be hugely helpful for us," he says.
He's also hoping a new insurance exchange would level the playing field with bigger firms. "We pay much more for our policy than other companies down the street that have large payrolls," Schellenberg complains. "I'm penalized because I don't have 5,000 workers."
Another way to make the insurance market more competitive would be to repeal the antitrust exemption insurance companies enjoy. "There is very little meaningful competition among companies in my area, meaning that the marketplace has no significant opportunity to keep down prices," he says. Mostly he wants more leverage when negotiating with insurers. "I am not opposed to paying fair prices for good and decent coverage, but the insurance companies have had everything stacked for them," he says. "And small business owners have everything stacked against us.
