Saturday, July 25, 2009

Tender Treasures and the Health Care Discussion

I am a small business owner. I have employed between 7-12 employees over the past 26 years in Montrose, California and in my warehouse in Altadena, California. Now, I employ 5 employees due to the economy. One thing that has been important to me for many, many years is a commitment to providing health care for my employees despite the nay-sayers who complain that small businesses can't provide health care.

Initially, I started offering health care after the 1993 legislation in the State of California provided for a small business pool of insurers. It was called the Health Insurance Plan in California, and as a small business owner I was given over 30 different insurance plans from which my employees could choose. By law, I was only required to pay half of the lowest cost plan and withhold half from my employee’s salaries. In the early years I provided health insurance for anyone who worked 20 hours a week or more. The participation formula required that at least 50% of eligible employees must buy into the plan. If they wanted, employees could choose more expensive plans and pay the difference. It was always my choice to offer one of the medium plans as a baseline for which I paid my half.

In 1999, administration for HIPIC was turned over to a non-profit private agency to administrate. Insurance agents entered the picture although I never did utilize an agent for my business. It wasn’t necessary because the plan was equal for everyone, and all one had to do was provide qualification data for your employees. The new private entity was called Pac Advantage. We still had enough choices to provide a flexible health care choice of plans for employees, even though it was not as varied as the original plan run by the state. Each employee would be sent a simple to understand letter listing all of the plans and the price, along with an easily understood listing of what my business would pay toward each of the plans.

Two years ago, Pac Advantage went out of business suddenly, leaving 50,000 small businesses without insurance. I am not clear on what caused its demise. I scuffled and found a Blue Cross plan through a broker that works well for us, but now the participation quotient is 75% of eligible employees. As an employer I am being forced to cut back my insurance offerings to only full time employees now since I have a small staff, and if even one person does not want the insurance but is eligible it disqualifies the company because we will have less than 75% participation.

I want to provide health insurance. It is increasingly more difficult and expensive to do so. I am not afraid to have a requirement for health insurance because I already know I can do it. If the cost could be brought under control, I would love to provide full coverage and not require my employees to pay half. Right now, it costs me $1000 a month for 3 employees. They all have chosen my medium Blue Cross HMO plan and seem happy. I have seen that it can work when the government utilizes its massive amount of participants to negotiate the contracts with the insurance companies. It worked for me, and 50,000 other businesses in California. As the insurance companies pushed back, and took control of the plan, it failed.

I want to support President Obama on his attempts to provide healthcare for every American through a robust public option. The time has come to stand up for what is right for our citizens. Starting over, I believe, is not an option. Private insurers provided wonderful coverage for my employees under a state negotiated and mandated plan. It can be done.

I have seen first hand what a difference it makes for my employees to have health care, to be confident that they will not become destitute because they are sick and to take care of themselves in a responsible manner.


Gerry Puhara


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