Thursday, October 15, 2009

Small Employers Struggle to Offer Health Insurance

by John Tozzi

posted by Adam Lindheim

Unlike most small employers, Boeggeman, George & Corde, a New York law firm with offices in White Plains and Albany, pays full health insurance coverage for each of its 23 employees and their families. At least for now.

Premiums are rising so quickly that partner Richard Corde has been grappling for six years with whether to make workers pay part of the cost. In that time, the health-care share of the firm's total compensation budget has doubled, to 10%. When Corde went to his insurer, Health Net (HNT), to arrange a November renewal for the firm's' policy, he was given a 22% higher rate, an increase Corde says is typical. He has switched insurers at least three times to avoid such hikes. To keep the policy affordable this year, he agreed to higher deductibles for doctors' visits and prescriptions. Even with the concessions, the firm will pay about 9% more this year—close to $200,000. "I don't know how many years of those kind of increases I can absorb," Corde says.

Washington lawmakers are trying to write legislation to contain health-care costs and expand coverage. But even if reform passes this year, any effect on the price of care won't manifest until 2011 at the earliest, according to an analysis by PricewaterhouseCoopers. Many small businesses, some closing the worst year (or two) in their histories, face hard questions about how—and how much—to pay to keep their employees and their families healthy.

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