LOUISVILLE, Ky. (Aug. 27, 2009)— For many small businesses, health insurance is the second greatest cost behind payroll, but business owners can find creative ways to save on costs.
That's the message Louisville-based Kiely Hines & Associates Inc. has for tire dealers wondering if they need to scale back health care coverage in light of escalating costs.
Kiely Hines in June contracted with the Tire Industry Association (TIA) to help its members find affordable health insurance plans, as well as dental and eye insurance. The firm has worked with TIA and its forerunner organization, the International Tire & Rubber Association, for the past 12 years in brokering product liability insurance for retreaders.
Jim Brown, a Kiely Hines principal, executive vice president and chief information officer, told Tire Business that when it comes to health insurance, tire dealers have to think outside the box, so to speak, rather than default to just calling various insurers for quotes.
Mr. Brown said a lot of small businesses in various industries are turning to high-deductible plans with health savings accounts (HSAs) and to “mini-med” plans to save on health insurance.
“They're not full-blown health plans but they're plans that can be custom designed for each business based on…giving some health insurance rather than not give them anything at all,” he said.
A mini-med is basic insurance that can cover doctor visits with an office co-pay, prescription drugs and a limited amount of hospital stays or surgeries. Employers can decide how much of the costs they will share with employees and whether to buy plans with emergency room or intensive care policies.
Mini-meds also can be used in conjunction with high-deductible plans to fill in gaps in coverage. “There's a myriad of plans out there that, with some work, people can keep their health care affordable without losing all their health care coverages,” Mr. Brown said.
He said mini-meds are nothing new and were originally designed for businesses with a high number of blue-collar workers and a lot of employee turnover. These plans give employees the ability to have preventative care rather than skip on physical exams.
“A mini-med is kind of like a cafeteria,” Mr. Brown explained. “I go to an employer and say, ‘These are things you can put in your mini-med.' What I tell an employer is, ‘How much can you afford to spend per month on an employee?' So then when he tells me this, I'll sit there with him and say, ‘Here are the top five to seven items that people put in a mini-med. Here's what each one of these cost you per employee.'”
Mr. Brown said he then can customize a plan according to the employer's needs.
The down side to mini-meds is clearly communicating to employees that such plans are limited in what they cover, he acknowledged.
“When you talk to employees, it's like anything else in the world. You hear what you want to hear,” Mr. Brown said. “They hear they've got health insurance. As we make the presentation, we're very clear that this is all it covers…. It's not a major medical. It's not going to pay 80 to 90 percent of your hospital stay.”
In July, Kiely Hines launched a national mini-med program for TIA members that TIA endorsed. The association cited statistics from the Henry J. Kaiser Family Foundation that reported premiums for employer insurance plans rose 5 percent in 2008. Firms with fewer than 24 employees saw their premiums jump 6.8 percent in 2007.
The brokerage obtained some mini-med deals for TIA members that typically only large groups could have, such as access to a mini-med provider's service call center for benefit questions and enrollment.
The firm also can help dealers shop around for traditional medical plans with insurers such as Blue Cross/Blue Shield, Aetna and UnitedHealthcare. “We're offering mini-meds but we can also offer people full-blown health insurance,” Mr. Brown said. “So they're going to have both (options).”
Licensed in 38 states, Kiely Hines also handles health insurance administration and paper work for companies.