high cost of health care ,Health insurance doesn’t come cheap

Providence Church

Not even men of God are immune to the high cost of health care.

Jim Hagen, director of administration at Providence Church in Avon, said skyrocketing health insurance costs pushed the congregation to switch providers last year. And two years ago, the church was forced to increase the amount of the deductible per family – from $500 to $5,000 – for the four full-time pastors who receive coverage.

The church’s health care costs increased 40 percent between 2004 and 2007, he said.

“I don’t think we’re any different” than any other business dealing with higher health costs, he said. “Rates keep going up and up, especially in the last three or four years. It got so high we shopped around two years ago and found out that our provider was the cheapest. That’s not good news.”

Although it was necessary to raise the deductible to keep costs low for the Detroit Road church, doing so helped the pastors because their premiums were also lowered. Pastors are paid a compensation package instead of a separate salary and benefit package, so their salary is the amount left over after health insurance premiums, housing allowance and other benefits are deducted.

With a lower premium, Hagen said the pastors get to keep about $6,000 more of their money, although the tradeoff is the high deductible.

“Essentially, the savings are passed on to the employees,” he said.

Hagen did not want to comment on how he felt about the government getting involved in health care because the issue has become a political one, and the church is a tax-exempt entity.

- Adam Wright

Berki & Nehr

Health insurance doesn’t come cheap, even when only one employee at a small company is covered.

Dave Nehr, senior partner with the law firm of Berki & Nehr in Elyria, said only one of the three full-time people at the firm eligible to do so has opted into the group health insurance he offers. It costs the company between $385 and $400 per month for coverage for that one employee, he said.

If all five of the people at the firm, including two part-timers, were covered, it would cost the company between $1,200 and $1,600 a month, Nehr said.

“It’s insanely expensive,” he said.

And because the person at the firm who receives health care coverage is a woman, the insurance is more expensive because – according to the insurance company – she might become pregnant, he said.

Nehr said he used to take advantage of the company’s insurance before marrying a teacher and going on her insurance policy.

Berki & Nehr has been in business for 5½ years and has changed health insurance providers three times in an effort to get better rates, but Nehr said that in spite of the effort, the cost goes up each year.

“It’s almost as if the insurance companies conspire to, no matter what, raise rates,” he said. “All they care about is making money.”

Nehr said he doesn’t know if the health care reforms currently being debated will result in any changes.

“How long have we been saying health care needs to be reformed?” he said.

- Brad Dicken

Turtle Plastic Products

Turtle Plastic Products Vice President Michele Norton said her company is always looking for ways to save on health care costs.

And one way to do that was to improve the health of the company’s 10 full-time employees so that they’d require less health care.

“We had the Biggest Loser weight-loss contest here, and we offered a smoking cessation incentive where two employees quit smoking for six months and got a $500 bonus,” Norton said. “They’ll get another $500 if they go another six months.”

In addition, several female employees have been spending their breaks walking in the industrial park where the business is located on Industrial Parkway Drive in Lorain, and they recently spotted two male workers following suit.

The employees also bring in from home fresh fruit, protein powder and flax seed and try to make smoothies four times a week, Norton said.

Having healthier employees helps reduce the need for expensive health care, Norton said.

Turtle Plastics has had to increase employee co-pays for their insurance and has a set amount it can afford for health plans.

“We tell them, ‘This is how much money we have, these are (the plans) we can offer’ and then they choose what kind of coverage they want or can afford,” Norton said.

She said she doesn’t know how government involvement would impact health care in the long term but said she doesn’t want government regulating the industry.

“This is just my opinion, it’s not the opinion of my company, but I think there’s too much government involvement in our lives right now,” Norton said.

Turtle Plastic Products manufactures tiles, flooring, plastic cribbing and other products using recycled plastic.

- Alicia Castelli

Benko Products

Jennifer Visalden said health insurance premiums for the 40 or so full-time employees at Benko Products in Sheffield have increased an average of  9 percent a year over the past several years, said Jennifer Visalden, a spokeswoman for the company.

“We used to pay 100 percent for coverage for our employees,” Visalden said. “Now, we’re having the employees pay 50 percent, and we’re thinking about dropping it altogether.”

A number of employees at the plant, which manufactures industrial ovens, dropped their coverage when the employee share went to 50 percent, Visalden said.

“There are several people with no insurance right now,” she said. “For a family, it kills you.”

While she’s not sure what she’d like the government’s involvement in health care to be, she said the recent change to COBRA coverage was a devastating change for businesses, and she’s not anxious to see what the government would do next.

COBRA insurance is offered to employees who are laid off and lose their health insurance as a result. In the past, employees paid for 100 percent of their COBRA coverage. Now, employees only pay 35 percent, leaving their previous employer to pick up the remaining 65 percent for as long as 18 months.

Benko Products manufactures industrial products including Sahara Drum Hot Boxes, Sahara Industrial ovens, gangways, self-leveling stairs, post hole diggers, hazardous material storage buildings and other material handling equipment.

- Alicia Castelli

Saxton Industries

Kyle Saxton said he believes that the government needs to stay out of the health care industry.

Saxton, owner of Saxton Industries in Sheffield Lake, has been in business for 10 years and employs four people.

“I don’t think the government has proven to compete well with private enterprise,” Saxton said.

All of his workers are eligible for health insurance through the business, although the coverage offered has been slightly reduced over the years.

Saxton said the increase in co-pays and premiums has had a definite impact on the company’s bottom line.

“They are an expense that drives the cost of doing business up,” he said. “There are more and more out-of-pocket expenses.”

Saxton said he thinks government involvement in health care would hurt business in the long run.

“The government hasn’t proven to me that they can be a cost-effective buyer or supplier or manager of goods and services,” he said. “So why would I think they could do this better than the private sector? No matter how I like it today, I don’t think I’d like it better if the government got involved.”

Saxton Industries manufactures lubricants designed for severe applications, extended service cycles and energy efficiency for use in high-temperature environments such as kiln cars, furnace table bearings and ingot buggies.

- Alicia Castelli

National Association of College Stores

Use of wellness and safety programs has allowed the National Association of College Stores in Oberlin to keep increases in health care premiums at 2 to 5 percent the past several years, according to company spokesman Charles Schmidt.

“It’s not by luck, it’s by design,” Schmidt said. “We have been successful through the focus on wellness at keeping our health costs managed for the employees and company and still offer a comprehensive health care package.”

NACS, a trade association for college bookstores, and its related companies employ about 190 people.

Schmidt declined to state the overall cost of offering health care, but said NACS is pleased with coverage over the past several years from Ohio Medical Mutual.

He said NACS’s employee contribution rate is less than 20 percent of the health care premium, which is lower than the Cleveland and national average.

Wellness initiatives have resulted in NACS Inc. being awarded the American Heart Association’s “Fit Friendly Company” award at a gold level of achievement.

Promoting health and safety has also earned NACS three awards from the Ohio Bureau of Workers’ Compensation:

n The 100% Award, for working the entire year without a lost-time injury.

n The Group Award, for having the lowest incident rate in its group.

n The Special Award, the workers’ comp bureau’s highest award of all, for going six years without a lost-time injury.

In addition, NACS Inc.’s wholly owned subsidiary NACSCORP received the bureau’s 100% Award and the Achievement Award for decreasing its incident rate by at least 25 percent from the previous year.

Schmidt said the NACS Safety Team provides input to the company on ways to improve health and safety. It is headed by Human Resources Manager Karin Mayfield and includes Facilities Director Ben Ryba, who is a volunteer firefighter in Oberlin. Each safety team member is certified in First Aid and CPR.

Initiatives spearheaded by the safety team over the past several years include purchase of two portable heart defibrillators; guest speakers on nutrition and quitting smoking and promotion of exercise through NACS’s annual walking competition.

The safety team also helped create the annual Health Fair, held every November, which provides employees with blood screenings, blood pressure checks and education about health and wellness, Schmidt said.

- Cindy Leise

Poppee’s Popcorn

The national debate over health care is making many business owners nervous, including Jennifer McGuire, who owns Poppee’s Popcorn in North Ridgeville with her brother, Tom.

“I would not like to see the government involved,” McGuire said. “They’re taking over too many private industries as it is. It ruins the whole concept of free enterprise. The less involved they are, the better.”

Poppee’s employs 26 people, nearly all of whom receive employer-provided major medical, dental and vision health insurance coverage. Workers pay only $20 a month, and the company covers 50 percent of costs for dependents.

In 2008, that coverage cost Poppee’s a little more than $100,000. That figure will rise this year, thanks to a 14 percent increase in costs that the company was notified of in June.

“Our costs were increased a bit for their coverage, but we want them to take it,” McGuire said. “We don’t want anyone not taking it, because they have to pay a higher deductible,” which she estimates to be between $1,000 and $1,500 per person.

All but a few employees who have insurance through spouses or other means take advantage of the company-provided insurance. Everyone gets free life insurance, and employees have the option of getting supplemental insurance.

When the cost of insurance goes up, it has an impact on the bottom line.

“The more overhead we have, the more we have to charge our customers,” McGuire said. “Costs are going up for just about everything. Everyone is hurt by it. We try to keep (increases) to a minimum.”

- Steve Fogarty

Automotive Equipment Inc.

As controller for Automotive Equipment Inc. in North Ridgeville, Al Jenkins shops around for health insurance every year, ever watchful for a more cost-effective plan.

But steadily rising costs have led the automotive tool and equipment shop to go from paying 100 percent of health care costs for employees to splitting the bill 50-50 with the seven of 16 workers who opt for coverage.

“We’ve worked our way down from paying 100 percent of it to 50 percent, but we’re still paying more than we were 20 years ago,” Jenkins said.

When Jenkins started with the company more than 20 years ago, health care insurance cost the firm about $4,000 a month.

“And that was when we had 30 people on the plan. It was better coverage, but there was no dental,” he said.

Now, Automotive Equipment, which also sells and repairs new tow trucks and used vehicles, pays about $5,700 each month, including dental coverage, to insure the seven, each of whom pays a $750 deductible.

Employees’ monthly costs range from a couple hundred dollars for a young single man to roughly $1,400 for family coverage for a worker in his late 50s.

“Each side pays half. It still costs a ridiculous amount,” Jenkins said.

Two of the remaining nine employees receive benefits through Medicare, as they are older than 65.

“The others are on their wife’s plan, or simply can’t afford anything,” Jenkins said.

The firm’s medical insurance includes major medical coverage plus prescription coverage, Jenkins said. Workers also have the option of taking a separate dental insurance plan, which costs $100 a month for family coverage and $35 for individual.

Ten of the 16 workers opt for the dental package.

“We had one person who could not afford medical but could afford the dental,” Jenkins said.

Jenkins said that despite the costs to the company now, a federally mandated insurance plan scares him.

“If the government forces employers to offer some form of insurance, God only knows what other rules and regulations they will put on it. I only see costs going up if the government is involved. How are we going to keep these employees if it costs them money to work for us?”

- Steve Fogarty

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