Voices on health care: Businesses

Teresa Janiga

City: Dallas

Owner, home-health franchise

Situation: Owns a Visiting Angels home care franchise in Dallas. She doesn't offer coverage to her caregivers now but plans to do so once she gets a handle on the costs. Janiga looked into offering insurance to her workforce last year, but she found that, even with her paying a share, it would cost employees too much.

Impact of ACA: Because her business employs more than 50 full-time workers, Janiga will be required to offer affordable insurance to her workers by Jan. 1, 2015. Janiga is waiting for the exchanges to open so she and her employees can explore their options.

Janiga's view: We're going to do it. Maybe not in January. But it would really get us a good quality of caregivers. They'll say, "Hey, they offer insurance."

It’s going to be a cost. but I don’t know how much. I hope it’s not so out there. We can’t just raise rates and pass on the added costs. We’ll probably will have to, to some extent, though. Right now we’re waiting for the exchanges to see what their rates are. Once we see what the rates are on the exchanges we can crunch our numbers. And we can see what kind of rates insurers offer us.

I had looked into rates last year. I knew this was coming, so we did some calculations then. It wasn’t at the (cost) point where out caregivers could afford it, though — even with me paying my portion.

My biggest concern now is logistics. We have some caregivers who might work 40 hours a week for a while, then not work for three months. I have some who work only six or eight hours a week. We’re more like a staffing agency with a lot of people working different hours and number of hours. So, it’s hard to determine who would qualify for coverage and who would not. But I’m definitely over 50 employees, so I would have to offer it or face the penalty in 2015.

Once these exchanges get set up I will do lots of communication with the caregivers. I have some who are very interested. Some have called and want to know when we’re going to roll it out. I tell them once we know what we’re rolling out, we’ll tell them.

Max McAllister

City: Woodstock

Owner, manufacturer

Situation: McAllister owns Traxxion Dynamics, which makes and sells motorcycle suspension components in Woodstock. He offers full coverage to his nine full-time workers and pays 100 percent of the cost. Rising costs make it harder each year.

Impact of ACA: McAllister's business is small enough that the employer mandate will not apply to him, but he intends to keep offering full coverage to his people anyway.

McAllister's view: I have nine full-time employees and I provide 100 percent paid health insurance to any one of them who doesn't get it through some other means. If the spouse of one of my employees has great coverage and they get their insurance from that employer instead, I take that into consideration in the compensation I offer them. Seven of the nine do take it from me.

I pay 100 percent because it’s my experience that if I offer to pay only a portion of it, people won’t want to pay the difference and they just won’t take it. The employer doesn’t have to pay anything, and the employee ends up without insurance. I just think offering coverage is the right thing to do. I feel it’s within my scope as an employer to do this. I don’t want anybody working for me to go bankrupt over an appendix. Not on my watch.

If you’re a younger employee, say 30 or less, and you make $25,000 or $30,000 a year, it’s very difficult to pull $300 a month out of your paycheck to buy insurance. Younger people tend to be healthier anyway, so they think they can get away without it — until they have some catastrophic problem. But the costs for me are significant. Like $30,000 a year. And our revenue is down and we’ve had to cut staff. We used to have 12 people. We’re skating by. I cut my own pay. I want to give my people a raise, but I can’t because of health care.

Now I’m shopping around for insurance, not to give them the best health care, but to see what we can squeak out of the budget. Prices keep going up. I pay 50 percent more now for 25 percent less coverage than I used to. Historically, we’d pay maybe $220 per employee in the first year of the policy. It would go up each year after that and we would drop it and switch carriers in the third year. That way we’d get a lower startup rate again.

But this year, for the first time, we were not able to get a policy for a reasonable price. The best was $332 a person. I sensed the insurance companies were ramping up their prices in anticipation of Obamacare and the added cost of regulation. The employees pay more, too. The deductible was $1,500 three years ago. It’s $3,000 now. To a young guy, that’s a used car.

Worst case, I throw my hands up and say, sorry, people, I can’t do this anymore. So they lose a $300-a-month benefit and have to buy their own insurance. If they have to pay $300 a month and $3,000 out of pocket in a year it’s $6,600. So the employers lose and the employees lose.

The exchanges are one of the biggest misconceptions. The illusion is that the Obamacare is free. Where are we going to get the money for it? Will the government fund it? We are the government. Again, employees lose.

The health insurance companies will be the only winners in this mess.

Jesse Maddox

City: Atlanta

Owner, tech startup

Situation: Jesse Maddox is the founder of TripLingo, an Atlanta tech firm with five full-time workers that sells a travel language app. His firm offers coverage through a "professional employer organization" or PEO, a company that enables employers to outsource management of human resources, employee benefits, payroll and other services.

Impact of ACA: His employee health insurance costs are about $4,000 a year per person and, Maddox notes, "It adds up." The exchanges are a good idea, he said, because having people who are uninsured drives up the cost for everybody.

Maddox' view: Generally speaking, in technology, pay, culture and what you're working on decides whether people come to work for you and whether they stay, not whether you offer them health care. But it's just assumed that you will provide them insurance. There's no question about it.

If you don’t offer it, someone else will — and they will be glad to take those valuable people off your hands. The competition for technology talent is extremely tough. And the cost of losing people is very high. The cost of offering insurance is a drop in the bucket in comparison to losing people.

When you’re dealing with high income earners, it’s actually a pretty small piece compared to salaries. Besides, health care costs are the same whether people are earning 100 grand or 30 grand. Still, our costs are about $4,000 a year per person. It adds up. The company pays 80 percent of the premium.

We use a PEO. That way, a five-person company like ours can get a similar price for health insurance as a Fortune 500 company.

The PEO handles time-consuming human resources tasks so that I can focus on my business. At a certain scale it becomes more efficient to bring human resources in house, but for small companies it makes less sense.

I personally was uncovered for about eight months after I went off my parents’ insurance at 26. I was driving a motorcycle then. I thought about not having insurance sometimes when I was riding. It was a little risky. But I think it comes with the job description of an entrepreneur.

I would care if I didn’t have insurance. I don’t feel like I’m in danger, but I probably would want some catastrophic insurance. I wouldn’t want my whole life to go down the drain if I had a bad car accident.

You do hear horror stories of people going bankrupt.

Once you have insurance you don’t really think about it. Even now, though, there are times when I would have gone to the doctor but didn’t want to pay the $70 copay.

Lisa Evans

City: Carrollton

Large corporation

Situation: Lisa Evans is health director at Southwire, a major employer with 5,500 active, full-time employees. They pay about 15 percent of their premiums, with Southwire covering the rest, better than many other companies where workers might be responsible for 20 to 25 percent.

Impact: Medical insurance costs are increasing for several reasons, including mandated health reform provisions, and even large employers and their workers aren't immune to the impact.

Evans' view: Strictly from a financial view, it is much less expensive for most companies, Southwire included, to pay a fixed penalty of $2,000 per person (for not providing employee insurance) over what we pay today.

However, you have to understand the impact on your employees/family’s lives … never mind productivity, absenteeism, etc. And you need to know what your competitors are doing.

Southwire has always been a family-oriented company and health care has always been a part of this relationship. It is important to our employees, so it is important to us as a company.

Southwire plans to continue coverage in 2014 based on what we know today.

But in 2014, Southwire will owe a new reinsurance fee (of $63 per covered employee) that will increase our overall costs by at least 2 percent with this one item alone.

Employees pay a percentage of our total costs, so if the company’s costs go up or down, so does our employee’s share.

Our employees pay $70 a month for single coverage with a $500 deductible and a $15 copay, and about 93 percent of our eligible employees are enrolled in our coverage.

As long as Southwire is offering coverage that is more affordable and provides better care than what is being offered in the public marketplace, it makes sense to continue to offer coverage.