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Sweet marketing music

Tanner Montague came to town from Seattle having never owned his own music venue before. He’s a musician himself, so he has a pretty good sense of good music, but he also wandered into a crowded music scene filled with concert venues large and small.But the owner of Green Room thinks he found a void in the market. It’s lacking, he says, in places serving between 200 and 500 people, a sweet spot he thinks could be a draw for both some national acts not quite big enough yet for arena gigs and local acts looking for a launching pad.“I felt that size would do well in the city to offer more options,” he says. “My goal was to A, bring another option for national acts but then, B, have a great spot for local bands to start.”Right or wrong, something seems to be working, he says. He’s got a full calendar of concerts booked out several months. How did he, as a newcomer to the market in an industry filled with competition, get the attention of the local concertgoer?

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by Andrew Tellijohn
June - July 2006

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Health insurance

business builder health insurance  

Find the right
fit when choosing
health plans

by Wayne Sultan  

Health insurance is one of a company's greatest expenses, but to stay competitive, even small companies are pressured by the marketplace to offer some type of coverage.

In 1993, state law mandated that insurance companies offer small businesses health insurance within specific guidelines, which put a ceiling on the premiums that can be charged as well as the percentage by which premiums can be raised each year.

Companies with 2 to 50 employees come under this mandate and must pay at least 50 percent of the premiums to qualify as a group.

The challenge is to know what to offer as there are hundreds of plans available. How do you work through the maze?

First, find a health insurance expert to help you. Ask for referrals to agents from your business associates and friends. You may prefer an independent agent who works with several companies and can offer comparisons.

Once you have some agents in mind, talk to them about their experiences in designing group plans, the size of groups they typically work with, what insurance companies they work with and how long they have had those relationships.

Having selected an agent, you are ready to move on to the hard work of making the best choice. The first task is to determine what you want to achieve by offering health-care coverage as a benefit to your employees. To do that you need to ask some basic questions of your agent and yourself, including:

• Besides the obvious objective of lowering premiums, what do you want to achieve in offering a health plan to your employee?

• What is important to employees? A plan with 100 percent or nearly 100 percent coverage, a consumer-directed plan with a high deductible and lower premiums?

• What are the demographics of your employee group? Mostly young and invincible? Older, wiser and with some aches and pains?

• Is your plan competitive and does it help you compete in your market niche?

• If your plan is up for renewal, is the renewal offer fair?

• What can you afford?

In setting goals, you need to look out more than one year to determine how this benefit will help you be competitive long term. The agent also will take into consideration the demographics of your employee population and the culture of your business. It is important that your plan not only is affordable but that it is designed to be effective.

Choices, choices
Flexibility is key to managing costs and expectations. For example, the right plan may be a high-deductible consumer-directed plan with a health savings account (HSA). That may be attractive if most of your employees are able to put pre-tax dollars into an HSA and pay their health care costs out of pocket with pre-tax dollars.

However, as with any high-deductible plan, it might not be as good choice when most of your employees are not likely, either because of lifestyle or income, to take full advantage of an HSA and be able to pay the upfront costs of their health care.

And because the plan is more complex, it might not be the right plan if your employees speak English as a second language, for example, or if their education level is low.

A good agent can assist you in making such as assessment and then provide you with options that you and your employees can afford.

As long as you meet the 50 percent requirement, you can choose also to partially fund your employees’ HSAs accounts. In fact, some employers will partially fund these accounts even though their total costs the first year of the new plan remain constant with their old plans. The expectation here is that employees will change their behavior once they have more responsibility for how their health-care dollars are spent.

A recent study by Blue Cross and Blue Shield of Minnesota found that people with high-deductible plans with HSAs spent 14 percent less than persons with other plans, even after adjusting for differences in health.

One example
As an example of one option for employers, let's look at an HSA plan for a two-person firm. The owner is married and has five children with one employee who has single coverage. Both are in their 50s. The premiums for this two-person firm are about 1 percent below average. The plan works for this company because of the demographics, culture and the cost.

The current plan renewal premium, paid 100 percent by the employer, would have been $2,650 a month.  The benefits provided under this plan are 100 percent coverage subject to a $15 office co-pay and a prescription copay.  The annual employer contribution would have been $31,800.

The employer chose to offer a high deductible plan with an HSA at the renewal. The single person's deductible is $2,650 annually and the family's deductible is $5,250 with 100 percent coverage thereafter. The owner chose to continue to pay 100 percent of the premiums for both himself and his employee, which totals $1,550 a month.  In addition, the employer will fund 100 percent of his and his employee’s deductible in the Health Savings Account.  The employer's contribution for the plan is $18,600 in premium and $7,900 in HSA funding for a total annual contribution of $26,500, or a $5,300 annual savings when compared to the plan up for renewal.

Another option would be for employers with 10 or more employees to offer a dual choice option, in which employees have two plans to choose from. Employees can choose either a low-cost, high-deductible health plan with an HSA or a high-cost, more comprehensive health plan. When offering dual choice, employees begin to realize the premium costs to their employers when they are required to share in a portion of then.

It is just as important to take the time to consider your corporate culture, your employees' expectations and where you want to be in two or three years as it is to shop for the lowest premiums.

[contact] Wayne Sultan is manager of the Small Group Sales Department for Blue Cross and Blue Shield of Minnesota in Eagan: 651.662.6514; wayne_sultan@bluecrossmn.com; www.bluecrossmn.com