Why This Small Business Chose the Healthcare Exchange
Posted: May 09, 2014
As published in Providence Business News, May 5, 2014
My company, Mereco Technologies, a manufacturer of custom formulated materials for electronic applications, has been a fixture in the Rhode Island small business landscape since 1960. Over those fifty fours years, the company has always provided generous health care benefits for its employees.
As premium costs started to escalate around 2006, I became personally involved in the health insurance debate about the rise in premiums and the ability of the small business community to sustain the increases. I have served on numerous committees and panels, both government and private, investigating the issue. Unfortunately, I arrived at the conclusion that the current system of healthcare delivery is utterly incapable of putting the brakes on costs.
When Rhode Island decided to establish its own Exchange, HealthsourceRI, which incorporates employee choice into its portfolio of benefits, I found it intriguing but was skeptical of the desire and the ability of the Mereco employees to contribute the time and effort to assume some of the burden related to the choice of health plans. In the past, the decision on the plans to offer was made by me (or me and my partner Herb Spivack while he was alive).
After numerous meetings at Mereco, the employees decided that they would like to investigate the Exchange.
Prior to the April 1, 2014 renewal date, representatives from the Exchange and our Broker visited the company to make presentations. After more internal meetings, I decided to put the decision to a vote. By large majority, the employees voted to move to the Exchange. Employees cited the ability to choose from the sixteen-plan portfolio and potentially reduce their personal premium costs by determining the level of deductibles and co-pays they were comfortable with.
The enrollment was somewhat of a new experience for the employees, but they handled it well, and other than a couple of software glitches related to the issuance of new cards, Mereco is now off and running with the Exchange.
Most businesses in small group don’t have the luxury of a full-time human resource department. Benefit issues and decisions usually land on the shoulders of the individual running the business. This can be a tremendous diversion of time and effort because benefits, while a factor in making the business competitive for attracting talent, are extremely complex and don’t necessarily contribute to profits and cash flow. My hope was that by using the Exchange, and engaging the employees in the process, much of the burden and decision-making would be removed from my shoulders.
As I see it, the benefits available from the Exchange are both tangible and intangible. Certainly, employee involvement and knowledge have improved dramatically. Making their own decision on which plan to choose has make them feel that they have some skin in the game and control of their own destiny. A few employees even reduced their premium costs by choosing a tiered network available in the sixteen- plan portfolio. Best of all, the employees feel that they are part of a grand design by the State of Rhode Island to improve health care delivery and cost reduction for the future.
To my utter surprise, the assessment process built team spirit and a collective level of camaraderie that I hadn’t seen before in a company culture that operates much like a family. It provided me with a much better understanding of the health care challenges that the employees face on a daily basis and has certainly reduced the burden on me to try to provide a limited plan offering that would be equitable for all employees.
I have learned that nested in among all of the continual local rhetoric against “Obamacare”, the biggest argument against the Exchange is the availability of future funding. While I recognize that funding may be an issue, I also recognize that for once, Rhode Island has something to be proud of. HealthsourceRI is the top in every national survey that I have read, and is referenced as a model for exchange design, primarily due to the unique full employee choice option. Instead of striving desperately to become Number 25, Rhode Island IS Number 1 in a very important program with national visibility. Will the Rhode Island business community tear itself apart with contentious debate and let the Exchange collapse and wither away? Not if the small business community will cut through the myths and fallacies and give it a fighting chance to survive. There is a much higher probability that adequate funding will be generated, either from the state or the federal government, if we all pitch in to make the Exchange a success. HealthsourceRI is indeed a true native Rhode Islander!