Lindemann Chimney Supply: Newsletter March 2007

CURRENT NEWSLETTER

Lindemann Chimney Supply sells wholesale only to the chimney and hearth industry.

March 2007

Health Insurance

According to the National Federation of Independent Business, the cost and availability of health insurance is the number one concern for small business owners. Many chimney service companies have voiced these same concerns.

Most service companies start with one guy. He contacts an agent to secure health insurance for himself and often his family. An individual policy is created. Several health insurance companies are shopped by an agent and the most affordable plan with the desired coverage is found.

When the first employee is added there is a decision that is made. The owner will sometimes pay all of the insurance or sometimes not provide it. The decision is generally based on the employee's needs and the ability of

the owner to afford it.

As the company expands and adds employees the needs often change. As more employees are insured, a group plan tends to be the most cost effective way to provide coverage.

However with a group plan law requires that each employee receive equal opportunity to the benefit. For the first employee you hired, the company may have paid all of his premium as well as the premium for his family. In order to continue with this you must now provide the same benefit to everyone in the company.

This is where careful consideration needs to be made. Can the company afford to pay the premiums as more people join the plan? If there is no cost to the employee, most everyone will get on the plan. This potential liability can easily exceed the company's ability to pay it.

This is where many companies begin having their employees contribute to the premium.

81% of employers in companies with 3 to 199 employees pay at least 75% of the employee's individual premium. However 62% of the employers pay less than half of their dependant's premiums.

In 2006 the average annual premium was $4,242.00 for a single employee and $11,480.00 for a family.

These dollars can add up fast. That being said experts say that you should begin offering benefits the day you open for business. A company that provides benefits is more competitive in recruiting high-quality employees.

However, fewer than half of employers with 3 to 9 employees offer health insurance. But this increases quickly as the companies get larger.

If your competition does not offer benefits this may be a great way to gain a competitive advantage in the marketplace.

Those who realize the value benefits provide in hiring good talent often are far too familiar with escalating costs attached.

The rising cost of health insurance is a growing problem for small business. Business owners who provide benefits need to take a proactive roll or they will continue to see double-digit percentage increases year after year.

The good news is that there are some great options in the marketplace. They key is to hire the right agent who will keep you abreast on what is right for your company.

A good insurance agent should provide you with many options. They should annually shop quotes from at least three other providers. They should also provide you with quotes for several different plan changes.

For example, many companies now offer plan choices to their employees.

A high deductible plan is often a very attractive option to employees who are relatively healthy. These plans are often cost less money for the employee and the employer.

Health savings accounts (HSA's and HRA's) are a great way to put aside tax-exempt money for employees to cover their health expenses.

Affordable health insurance is available. But in today's marketplace employers need to take a proactive approach to seeking out the best options available on an ongoing basis.

BACK ISSUES OF OUR NEWSLETTERS

March 2007

Health Insurance

Jan/Feb 2007

Ben was right

December 2006

It's Dangerous

November 2006

Thanksgiving

October 2006

Chimney Problems

September 2006