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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Northern Grains, Inc. (Great Harvest Bread Company franchisee) | Anchorage, AK
Alaska bakery retailer:
Lower profits, but greater peace of mind
Dirk Sisson
Northern Grains, Inc. (Great Harvest Bread Company franchisee)
Anchorage, Alaska
Founded: 1994
Employees: 12 full-time, 20 part-time
Health coverage: High-deductible PPO
Insurance participation rules are barrier to offering coverage
When Dirk Sisson and his wife started a Great Harvest Bread Co. franchise in Alaska 15 years ago, they wanted to be the kind of business owners who took care of their employees. So they offered health insurance as a benefit to full-time staff members.
But after several years the premiums skyrocketed more than 50%. Also, the insurance company required at least three-quarters of the firm's eligible employees to participate. Few bakery staff members were willing to use the plan with a $50 premium contribution, so the owners had to drop the coverage.
The decision was necessary, but Sisson worried about their uninsured employees getting hurt while off duty and being bankrupted by medical costs. "I have some employees who are athletic," he explains. "They ski and bike. If something happened to them, I would feel really bad. I would never want one of my employees to have to rely on bake sales or fundraising in the event of a medical catastrophe."
As the national healthcare reform debate began to dominate the news in mid-2009, Sisson and his wife, Barbara Hood, started talking about offering health insurance again. "We have to do something for them," Sisson says. "I feel providing health insurance is important and that if we can afford it we're going to do it."
"Providing health insurance is important. If we can afford it, we're going to do it."
Employees 'thank me on a daily basis' for coverage
Sisson and Hood face the same affordability problem they did when they last offered coverage in 2000. The premiums are 20% higher than they were then, and the insurer still requires 75% participation. So the business owners have to pay the whole premium to get enough people to sign up.
The higher costs mean Sisson and Hood will be taking home less money from the business themselves. But the sacrifice is worthwhile when a bakery employee passing him in the hall thanks him for offering a health plan. "They're very grateful," he says. "It's changed their whole attitude about working here. Maybe they'll stay here longer-term. People thank me on a daily basis."
"What I'm doing for my employees is giving them a sense of relief."
Being covered makes workforce more productive
"I may have to forgo an occasional raise or bonus in order to provide coverage, but that's a reasonable tradeoff given how difficult it can be to obtain health coverage as an individual," Sisson says. He figures the health plan is equal to about $2 per hour in pay.
"What I'm doing for my employees right now is giving them a sense of relief," Sisson says. "It makes them more productive if they don't have to worry about it anymore."
The bakery owner believes in that principle for America's workforce as a whole, as well. "I believe in universal healthcare," he says. "If we had that, it would relieve people from the whole issue of worrying about getting appendicitis or something they have no control over. That situation can bankrupt somebody."
Healthcare reform needs to do two things, Sisson says: cut costs and expand coverage. "I have no objection to an employer mandate to provide health coverage if that's the most efficient way to cover the most people," Sisson argues. "But ultimately costs will have to come down."
