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June 26, 2004 - Subscribe - Contact Us - Rate Card - Place an Ad Valley&State Backpage O&E Sports Archives Classifieds Faith&Beliefs Obituaries Revels May 12, 2004 To insure, or not? By Vickie Aldous Ashland Daily Tidings For nearly 25 years, Geppetto's in Ashland was a rare example of a restaurant that provided health insurance for its employees. But owner Ron Roth was forced to cut the benefit after years of insurance-premium increases. Geppetto's owner Ron Roth supervises cook Justin Wisnewski during a lunch shift. Rising rates forced Roth to stop providing health insurance for his employees. Satsuki Doi | Ashland Daily Tidings "We were for many, many years one of the few restaurants that did have a health insurance plan," he said. "But it cost more and more. At first, we were able to pay for most of it. Then the employees had to pay more and more. Two years ago, we had to give it up." Sharp annual increases in health insurance premiums are preventing many businesses from offering health insurance benefits and causing other companies to drop coverage or raise employee contributions. Health insurance premiums rose 10.9 percent in 2001, 12.9 percent in 2002 and 13.9 percent in 2003, according to the 2003 Annual Employer Health Benefits Survey by the Kaiser Family Foundation and the Health Research & Educational Trust. Small businesses, with three to 199 employees, saw an even steeper spike of 15.5 percent in 2003, while larger companies saw a 13.2 percent increase, the survey reported. With its plethora of small businesses, Ashland is being hard hit by the jumps. An all-too-common problem Two decades ago, Roth said he could buy health insurance for a worker for $50 to $60 a month. Adjusted for inflation, that range would be $95 to $114 today. But today, monthly premiums for one worker average $234 in Oregon and $241 in the United States. Family coverage averages $596 per month in the state and $626 nationwide, according to the Kaiser survey. Premium increases in 2003 outpaced both inflation and the 3 percent growth rate for workers' earnings, the survey found. After dropping group coverage, Roth and his wife themselves went without health insurance for a year and a half before finding an individual plan made affordable by a high deductible. The couple try to help employees by paying a portion of the cost of visiting a nurse practitioner, he said. Graham Lewis, a member of the Ashland Chamber of Commerce Health Committee, said many local businesses are unable to offer health insurance. "What happens in Ashland is we have mostly small businesses. The U.S. Department of Labor counts a business with 500 employees or less as a small business. A company with 500 employees would be a big business in Jackson County. Businesses that would like to provide health care benefits can't afford to do so," Lewis said. "That makes it difficult for employees to stay here and raise families in Ashland." A decline in the number of businesses providing health insurance is the main contributing factor for the rising number of uninsured Americans, the Census Bureau reported in late 2003. The number of people without health insurance increased by 2.4 million to 43.6 million nationwide, or 15.2 percent of the population, according to the bureau. Of those employed, workers at small companies were least likely to have coverage. Only 30.8 percent of workers at companies with fewer than 25 employees had insurance in their own names, while 68.7 percent of workers at companies with more than 1,000 employees had such insurance, according to the bureau. The Ashland Chamber of Commerce has been working for years for legal reforms that would allow small businesses to form pools and buy insurance at less expensive rates. Members will take up the issue again in 2005 when the Oregon Legislature reconvenes, Lewis said. Meanwhile, the businesses that do offer health insurance continue their annual ritual of hunting among carriers for the plan that still offers important benefits but has the lowest price increase. But once again, small businesses appear to be suffering from a lack of clout and limited choices. In 2003, 62 percent of businesses with fewer than 200 employees went shopping for a new plan, but just 33 percent changed their insurance carrier or health plan type. In contrast, 43 percent of large firms, with 1,000 to 4,999 employees, shopped for a new plan, and 42 percent switched carriers or plan types, according to the Kaiser survey. Government feels pinch If the experience of the City of Ashland is any indication, small-business pools may not offer a silver bullet when it comes to controlling health insurance price increases. "We've been hit really hard and we're part of a pool of cities and counties," said Tina Gray, City of Ashland human resources manager. "Ashland is better than the pool on average, and our rate increase is still huge." Rates for one employee rose from $294 per month in 2002 to $366 per month in 2003. Family coverage jumped from $845 per month to $1,043, and rates are expected to increase this year as well, she said. "We've been told to plan for a 20-percent increase, although it may be less than that," Gray said. Because of sound management, the city government so far has not faced lay-offs and program cuts that other jurisdictions have experienced. But rising health insurance premiums and Public Employee Retirement System obligations are having impacts, she said. "That, combined with PERS, is making it so you can't hire anybody," Gray said. To help control costs, the city is instituting a 5 percent employee cost share as it negotiates new contracts with various employees and their unions. The city also has a wellness plan that offsets gym membership fees and the cost of routine exams for workers, provides reimbursement for programs to quit smoking, covers well-baby care and offers on-site cholesterol screens, according to Gray. "The wave of the future is to concentrate on keeping employees well," she said. Fighting back The Oregon Shakespeare Festival and the twin manufacturing firms Darex Corporation and Professional Tool Manufacturing in Ashland have taken the wellness philosophy to a whole new level. Darex and Pro Tool had been absorbing double-digit health insurance premium increases for several years, but hadn't asked employees to pay more or let those jumps affect salary and wage decisions, according to owner Dave Bernard. Employees instead had been seeing the effects in the companies' profit-sharing plans as the increases impact the bottom line, he said. To fight rising costs, the companies recently launched a wellness program that includes walking groups, exercise classes, gym memberships, nutrition and exercise advice, weight loss plans, stop smoking programs and other benefits, according to Bernard. Employees have a direct financial stake in the outcome. If the companies control costs, workers will receive half of the savings, he said. "If we save money, we're going to give a rebate to employees at the end of the year," Bernard said. The Oregon Shakespeare Festival has a longer track record with the wellness model. In 2001, the festival skipped the insurance company middleman and began self-insuring its employees. It sets aside $300 each month for eligible employees to cover medical, dental, vision and prescription costs. The nonprofit does have back-up catastrophic insurance in case major illnesses or injuries push costs above a certain threshold, according to Human Resources Associate Mary Bagshaw. "We've been able to maintain rates for the past two years. We haven't seen the horrible jumps other companies have," she said. "We're pretty cognizant of the fact that we are the insurance company. By keeping well and using plans judiciously, we're able to control costs." The festival offers regular Yoga and Yoga Ball classes, and has set aside space where employees can do weight training. "The convenience of it being on campus is good because everybody's schedules are so crazy. They're able to stop in at noon and do Yoga Ball for an hour and go back to work," Bagshaw said. "It really has a positive impact on people." The roughly 50 participants in on-site Weight Watchers meetings have lost a total of 1,300 pounds in the last two years, and several employees have gone through a smoking cessation program, she said. Four massage therapists also visit the festival, and while employees pay for a massage, the service provides a convenient way to reduce stress and tension, she said. The self-insurance model could be difficult for small businesses to adopt because they might not be able to set aside enough money in a reserve to cover medical expenses. Bagshaw said. Self-insurance also can be a gamble for small businesses that lack enough employees to spread the risk, according to industry experts. But Bagshaw said all companies can help control rising insurance costs by promoting healthy lifestyle changes. "Wellness is the answer," she said. DailyTidings.com Home Page Valley&State | Backpage | O&E | Sports | Archives | Weather | Classifieds Columnists | Faith&Beliefs | Obituaries | Revels | Subscribe | Contact Us Copyright 2004 Ashland Daily Tidings and Ottaway Newspapers All Rights Reserved Click Here Site Search: .:Advertisements:. RESOURCES - Mail Tribune News - ODOT Road Cams