Taking the pulse of small business

With the landmark passage earlier this year of sweeping federal health reform legislation, change is on the horizon for how New Hampshire small-business owners purchase and use health insurance for themselves and their employees.A survey by the Women’s Business Center of its members conducted just before President Obama signed the health reform measure into law shows deep concern as well as some hope for the way health insurance will be handled in the near future.”Obviously, costs were a great concern,” said Christine Davis, executive director of the WBC, of responses in the survey. “So many people are paying so much.”

Davis herself said that she went up an age group bracket this year, and was blindsided by the premium increase.

“I’m fit – I exercise six days a week. I was just shocked by the increase,” she said. “I never thought about health insurance in terms of a job preference, but it’s becoming harder and harder to be in one that doesn’t offer insurance.”

The survey asked members about their general experiences with their health insurance plan, if they had one, as well as their views on health policy.

Of the 135 respondents, well over half ran their businesses alone, with no employees, and nearly a quarter had five or fewer workers.

Almost 66 percent – 89 respondents – said their business did not offer health-care benefits.

About 33 percent indicated that insurance was too expensive, prohibiting them from purchasing a plan.

Others indicated that they had insurance through another job or that their employees had insurance from another job or through a spouse.

Slightly more than 41 percent said they paid the entire cost of their health insurance. Nearly 16 percent indicated the company didn’t cover any of the cost, possibly indicating that these insureds purchased plans as an individual, not a business.

Nearly a quarter of the respondents indicated some other type of payment arrangement. For example, one respondent said she paid 85 percent of her employee’s insurance, but the employee then picked up the full tab for spouse or family coverage.

Despite the rough economy, virtually half of those surveyed said they had not made any changes to their health insurance in the last 12 to 18 months, and almost 15 percent actually increased benefits.

“I was surprised so many did not decrease or eliminate benefits – most said they were keeping them,” Davis said.

Cost concerns

While the majority did not say whether they planned to reduce or eliminate health-care benefits in the next year or so, or indicated the question was not applicable, of those who did respond, 86 percent said they still did not anticipate making any changes to their insurance.

“As costly as it is, employers have a responsibility to provide coverage to their employees. Even if plans are not 100% employer paid, I believe there is still an obligation to offer employees benefits,” wrote one of the respondents.

The survey revealed that the lack of health benefits didn’t detract small companies from their ability to hire employees – but again, the majority of respondents were sole proprietors and only 50 respondents of 135 answered this question.

Several of those surveyed commented that this was definitely a future concern, however.

“My business is so small right now that health-care coverage is not an issue. But in growing the business, health care is a key concern – and yes, I think a lack of adequate health-care coverage would diminish my ability to attract and retain employees,” wrote a respondent.

Added another: “The matrix they use to analyze how much you will pay does make you not want to hire older workers – with a 50% increase in just benefits by adding an older person to the plan. Small businesses DO have to consider that as a factor when hiring because it COSTS more,” she wrote.

“This comment was one that surprised me the most,” said Davis. “As much as you don’t want age to affect your judgment, it really will cost more for health insurance.”

But the overwhelming theme was that health insurance costs were simply too high, whether seeking coverage for employees or simply for themselves.

In fact, one respondent wrote that her premiums increased by 60 percent in the past year, and another said that her rates had increased by 135 percent since 2002, but what portion of the increases were driven by member demographics is unknown.

So, not surprisingly, when asked what changes in health-care coverage they’d most like to see, finding a way to lower costs topped the list.

Others said that being able to join a group policy, such as a chamber of commerce or association, could be beneficial.

“I would like to be able to join a federal, state or other group policy. As an individual, I pay about 20% more per month than a large corporation pays per person. I have no argument paying for insurance. I strongly disagree with insurance policies which charge individuals/sole proprietors more per person than large companies,” wrote one respondent.

Another suggested, “Allow multiple small business to gather together to purchase health care. It is no longer my business with only five employees, but my business, my neighbor’s business, [my friend’s] store, and my landlord’s business. Now we are a diverse pool of 30 applicants and the rate is much better. Coverage is better too.”

With the federal health reform legislation passed, Davis said the WBC would probably wait until some of the provisions are rolled out before she surveys the membership again.

“But right now, people are facing very real issues,” added Davis.

Cindy Kibbe can be reached at ckibbe@nhbr.com.