One of the biggest financial concerns most small businesses face is providing health care. This week, WNPR’s Small Business Project is taking a two-part look at the health care crisis facing small employers. In the first of her reports, Harriet Jones talks to the businesses that are feeling the pinch.
Adchem Manufacturing Technologies in Manchester is a very successful Connecticut small business, employing 35 people.
“My name is Jason Wolf. I am 23 years old. I am a full-time employee here at Adchem. I’ve been here a year and a half now, and I’m actually leaving here this Friday and going back to United Technologies.
Even though he has health insurance at Adchem, one of the principal reasons Wolf is leaving is UTC’s richer benefits package.
“It’s about a $12,000 a year difference just in that—so it’s a pretty big difference.”
Michael Polo is President of Adchem and he says Wolf is just the latest of a long line of employees he’s hired, trained and then watched walk out the door.
“I lose very good employees to larger businesses strictly on insurance, not on wages or anything—it’s strictly on their health benefits.”
Polo pays $16,000 a month in health care premiums.
“Last year our insurance went up 28%, and we didn’t pass any of that on—we ate it. So it’s caused us to totally change a lot of our other operations to cover those.”
He says one of his biggest frustrations is that the bulk of his workforce is older, and because he has a small number of employees, he can’t spread that higher risk and he’s paying more than many comparable companies. Polo says in every other way his older workers are an asset.
“They’re more level-headed, they’ve been around, they’re stable and all of those type of things, and frankly that’s really important to a small business. But for me to be penalized for having them doesn’t make any sense to me.”
That’s the view from a small business that provides health insurance. What about one that doesn’t?
“Young man with a child with an ear infection, simple ear infection, which would have been a 30-minute doctor’s office, at a pediatrician’s office, is in the ER for eight and ten hours.”
Kevin Galvin employs three people at his business, Connecticut Commercial Maintenance.
“So he loses that income, the family is starved financially because of that decision. I’m out a man-day, and my productivity goes down. And we found this to be absolutely stalling our business.”
Back in the 1980s he saw an opportunity to expand his company and begin employing more people – he says even back then, health care was prohibitively expensive, and because he couldn’t afford to offer it, he couldn’t attract the more skilled labor he needed and had to shelve his expansion plans. Galvin says other experiences have brought home to him how precarious his situation is.
“A young man who’s out for 12 weeks because he had an infected tooth that had gone unattended—got an infection, nearly died. So, as we drilled down into that as a small business, we find out that he had never had a hygienist clean his teeth in his life. Drilling down further, we found out that none of my entry-level employees had ever had a dental visit.”
Galvin is now President of Small Business for a Healthy Connecticut, a key support group for SustiNet, an effort to drive health care reform at the state level. Galvin says he’s excited about the possibilities of the bill currently being implemented.
“It gives choice, first of all. It gives a competitive product to the marketplace that hadn’t been there before—one that’s pretty much value-driven and not financial-outcome driven as many insurance plans are now.”
Sustinet is just one of several efforts currently underway to address small businesses’ access to health care. In a following business report, we look at those proposals to solve the crisis.