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The Right Prescription For Health-Care Cost Control
Health insurance costs have skyrocketed in recent years for businesses all over the country. It is no different for companies in the cleaning profession. And although many in upper management are fortunate enough to receive benefits, many full- and part-time cleaners may find themselves out in the cold with respect to coverage. However, it’s not impossible for building service contractors to be able to provide some form of health coverage for their workers; here are some tips on keeping it useful and affordable.
Why provide insurance for your employees?
There are many different reasons to provide a health insurance option to your employees, and they differ greatly in law and philosophy.
First, the law. In many states it is mandatory that companies provide health insurance options to their employees if the company has reached a certain amount of employees. Some states require that if you have 100 employees, you must provide insurance; with other states, the number is 200 or 300. The point is, each state varies, and you should be familiar with the laws of the state or states in which you operate.
“In California there is a new law that will go into effect next year that will force businesses with over 200 employees to provide health care to all of their employees,” says Simon Rocha, president of Priority Business Services in Brea, Calif.
This is a great concern to Rocha because he currently passes on the cost of the insurance option to the businesses that contract his employees.
“This new law will force us to provide that service ourselves, and it will either cut into our profit margin or force us to raise prices,” says Rocha.
Not all of the reasons to offer health- care insurance to employees are based on following the letter of the law. Joe Car, president of ServiceMaster Quality Cleaners in Anchorage, Alaska, has another take the situation on proactively, and is providing insurance absent a regulation.
“We have a tight labor market up here in Alaska, so we have to offer other benefits to attract good employees,” he says.
Some employers such as Car believe that in order to retain the quality of employees he needs, it is essential to provide health care insurance. However, the labor market varies from area to area, and benefits may be less important in areas with a larger pool.
Another important area to look at is workman’s compensation. Car believes that with health insurance as another option, there will be fewer workman’s compensation claims.
“I have run into situations in the past where an employee does not have health insurance, and they have a disaster happen in their life outside of work,” he explains. “It is easier to make a bad decision in regards to workman’s compensation fraud if they do not have health insurance.”
Keeping costs manageable
With the skyrocketing costs of health care prices over the past few years, the decision on how to pay for health insurance has become an important issue. In most cases the insurance premiums are split between the employer and employee (in varying percentages), but that could change.
“We are currently looking at this year not absorbing the increases that seem to come every year and splitting it with our employees; instead, we may have to pass 100 percent of the increase on to our employees,” says Joe Ewing, president of Ewing and Sons Inc., located in Dayton, Ohio.
Other options to keep costs in check include cutting the amount of coverage and raising co-pay premiums.
“We may have to also look at taking a lesser plan and use that to control costs so that the coverage can still be affordable for us as an employer but also affordable for our employees as well,” says Ewing.
David Bixler, president of Bixler Corporation located in Springfield, Mo., agrees that if prices get too high, not only will he have to pass on more than half of the burden to his employees but he also may drop coverage for some of them.
“Sure, if prices get too high, then we will have to drop the coverage for rank and file employees, but that may not be much of a factor for us because most of our lower level employees do not even choose to take advantage of the plan,” he points out.
Enrollment is another factor in prices and availability for insurance plans.
“In our case most of our younger employees, especially young single males, do not even enroll in the plan,” says Car.
Bixler has another view: “We decided to include all of our employees in the plan because it would give us a better group rate, but it didn’t help that much because of low enrollment.”
Finding a better value
There are several ways to find out information about lower or better insurance plans and how to participate in them.
In some states or regional areas unions are able to work with employers to provide health insurance at a lesser cost to the employer, the employee, and the union.
Insurance brokers are another way to go, as well.
“We spoke to a broker, and they were able to significantly lower our cost through their relationships with insurance companies,” says Ewing.
Insurance pools can also help in lowering costs. Many companies create relationships with other local businesses and by the sheer number of employees are able to buy their insurance at a cheaper rate. Like almost anything else bought in bulk, it is usually cheaper.
State associations also can be of some help and, in some areas, can negotiate a better deal through association contacts, so speak to your local BSC association or Chamber of Commerce for information.
The most important tip is to shop around; there are many different insurance companies out there with different types of coverages to choose from. If the policy your business has right now does not fit or is too expensive, look around; chances are there is a better fit out there.
“We spoke to multiple companies when we went looking for our policy and finally found one that was right for us,” says Car.
D.M. Maas is a business writer in Laramie, Wyo.
Up Close And Personal: George Bush In Letters
By Stacie H. Whitacre, Editor
All The Best, George Bush: My Life in Letters and Other Writings by George Bush. (Lisa Drew/Scribner, 1999, $30.00 hardcover, $16.00 paperback, available on cassette and CD)
Business owners and executives have long found inspiration from biographies and memoirs. A few years ago, when we asked building service contractors what they read, books about U.S. President John Adams and former General Electric CEO Jack Welch were at the top of the list.
With the announcement that former President George H.W. Bush will be the keynote speaker at this year’s ISSA/Interclean show in New Orleans, we decided to take a look at All The Best. While this isn’t strictly an autobiography or a memoir, this collection of correspondence and journal entries makes for an intriguing substitute. These chronologically arranged letters span several decades, from Bush’s early days as the youngest commissioned pilot in the Navy during World War II, through the end of his presidency.
Between his stint in the Navy and his presidency, Bush served as an oil executive, a Congressman, a party leader, an ambassador, director of the Central Intelligence Agency, and Ronald Reagan’s vice president. He also married, raised six children (daughter Robin died from leukemia during childhood), traveled extensively and jumped out of airplanes.
There are some lessons to be learned from Bush’s writing — for instance, he demonstrated a strong commitment to ethics, as well as fierce loyalty to friends, family and organization. For instance, he turned down a position on the board of McDonnell Douglas Corp. due to a potential for a conflict of interest, stemming from his recent tenure at the CIA. The correspondence also reveals his fierce loyalty to President Richard Nixon — for weeks, Bush, then chairman of the Republican National Committee, stood steadfast by his party’s leader, until he heard the direct evidence that Nixon had been involved in the Watergate cover-up. At that point, he no longer could support Nixon’s presidency, but the rest of the book is peppered with letters from Bush to Nixon, revealing that their friendship transcended the professional relationship.
Bush also demonstrates a thick skin, using humor in the face of criticism. In 1971, New York magazine included him in a tongue-in-cheek list of the 10 most overrated men in New York City (where he was living at the time, as U.S. Ambassador to the United Nations). He and wife Barbara decided to host a party in honor of the “overrated” so they could check one another out: “I thought it might be fun to get together,” he wrote to Broadway producer David Merrick, also on the list. “I’ll invite the guy who wrote the story plus the editor of New York Magazine — We’ll get some of my colleagues at the U.N. to come by so we can have an international judgment as to who is indeed the most ‘overrated’ of them all.” (p. 157)
He never does reveal who won, which is a weakness. Most of his business and political writings come with introductions, footnotes and follow-up, but the more personal correspondence — especially those showing this lighter side — seem to lack context.
And it is unfortunate, because these personal anecdotes give this book its readability and its charm. The student of history will find Bush’s political writings fascinating, but the rest of us might find them a bit tedious; however, stories of his family and his free time seem universal and are quite entertaining, and touching at times.
Bush will address the ISSA convention Nov. 17 – two weeks after the presidential election that will either see his son, President George W. Bush, elected to another four-year term, or defeated by Senator John Kerry. The timing should add an engaging subtext to the talk, regardless of the election’s outcome.
Need some quick business advice?
Inc.com, from the publishers of the venerable Inc. magazine, offers dozens of short how-to articles for small entrepreneurs. Topics range from getting paid on time (one contributor’s hint? Stop working if the payment is more than 20 days overdue), to developing a business plan (have you heard of an externally directed executive summary? Your plan needs one) and overcoming burnout (getting the right amount of sleep helps). Subscriptions aren’t required for most of the site’s features.
Rising gasoline costs are likely to be a burden for many building service contractors, who often use large, fuel-hungry trucks. The American Automobile Association’s Mid-Atlantic Region offers several tips for cutting gas costs, including:
- Accelerate gently, brake gradually and avoid hard stops.
- Purchase lower-grade fuel, unless mid-grade or premium gasoline is recommended by the vehicle’s manufacturer or a mechanic.
- Fill up at the self-serve pump.
- Use the air conditioner only when absolutely necessary.
- Keep tires properly inflated.
- Don’t let the vehicle idle for more than a minute.
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