Small businesses could provide benefits in ’07
The Spotted Frog Bookstore owner Karen Dallett could use the Utah Small Business Health Plan outlined in House Bill 122.
Her 13-month-old independent bookstore serves wine and coffee, and currently enjoys Park City’s winter out-of-town traffic in addition to a regular, local following. But while Dallett can afford to pay 10 employees, and treasures her bookstore staff which has stuck by her "since day one," if she were to offer health insurance, her business would not be viable, she says.
When she looked into offering health insurance for her employees, the most reasonable rate she found amounted to $1,200 per employee.
"You’re basically being penalized by the current insurance system for not being a large company," she contends.
For Dallett, the ability to offer health care to the active 20- to 26-year-olds who work for her is about caring for their needs, but it also has to do with retaining them.
The Spotted Frog has lost quite a few baristas to Wild Oats, because the nearby branch of the health food store chain can afford to provide benefits.
"It’s impossible for me financially to give health insurance coverage to my staff and that is a huge incentive for people to come to work for a small business," Dallett says. "People would love to work here at the café, wine store or the bookstore side, but they’re saying, ‘you know what? Wild Oats is paying us the exact same amount per hour, but they offer a health plan.’ And I don’t blame them. I would too."
The proposed HB122, sponsored by Rep. Steve Mascaro, R-West Jordan, would allow small businesses (those with two to 50 employees) to get health coverage under the Public Employees’ Benefit and Insurance Program in July 2007, and creates a Utah Small Business Health Plan Advisory Council.
The council, as described in the bill, would consist of a private health insurance executive, small-business representatives, insurance industry representatives and state agency officials. Established to examine and create a plan to insure small businesses, the council would eventually return a proposal to the committee at 2007’s legislative session.
In a Deseret News article earlier this month, the Utah Alliance for Health Policy Solutions reported 95 percent of the 600,000 Utahns working for companies with more than 50 employees have benefits, while only half of the 250,000 working for small business are insured.
A member of the Utah Alliance for Health Policy Solutions told the Deseret News that the loss of health benefits to small business employees was a direct result of the rapid rate of premium increase in Utah, up five times higher than earnings during the past five years and double the national rate.
It is unclear, however, whether HB122 will pass in 2006. Until this Thursday, Feb. 23, the bill had lingered in the State House the since its introduction in January. The bill has gone through two substitutes in the House, and has now been handed of to the Senate.
Dallett says if the bill doesn’t pass, it would be "an atrocity."
Before moving to Park City, Dallett owned an eight-employee interior architecture firm on the East Coast, and was able to afford to offer health insurance benefits through a program similar to the plan proposed by HB122. Each one of her employees, she reports, stayed with her for seven years until she sold the business.
"The fact that they stayed absolutely had to do with insurance, because if they had worked for themselves, they would not have been able to afford insurance either," she explained. "You know, individual insurance is so expensive. Family insurance is so expensive. I know people who are paying $400 to $500 a month. That’s insane."
In a ski resort town, for employers of seasonal workers, it’s likely more realistic to dream of insurance after a small business grows into a big business.
Keiko Moffett and her husband Howard employ six people at their Park City restaurant, Good Karma. Since it’s the family’s first restaurant, Keiko Moffett says benefits are not a "huge priority at this time," though she is concerned.
"A lot of our employees don’t have [insurance], and I think it’s a problem," she said. "I think everyone should have some sort of health insurance."
The Moffetts currently do not provide benefits to their employees, she admits. Instead, it will be something they will look into as more Good Karma locations open in the future. For now, the business needs to turn a profit, Keiko Moffett says.
"Howard is really so into helping his employees out, sometimes I have to remind him, you know, it’s a business Howard," she explained. "Yes, I think if [health insurance for small businesses] was more affordable, that would definitely be an issue he would be interested in."
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