F3 Engineering hosts Small Business Summit

F3 Engineering recently hosted a New Jersey Small Business Administration panel discussion that featured Health & Human Services Secretary Kathleen Sebelius on the topic of health care insurance cost issues that employers face.

SBA Panel
Photo Credit: ELIZABETH LARA/STAFF PHOTOGRAPHER

Thursday, June 25, 2009
BY CAROL FLETCHER
NorthJersey.com
STAFF WRITER

Lizzette Vazquez, co-owner of the 20-employee military parts maker F3 Engineering LLC in Paterson, has had to change health insurance providers several times because of increases of as much as 30 percent in premium costs, she said. She warned such changes can force employees to change doctors, and that diminished coverage might make it harder to hire people if they have better benefits at their current positions.

"Those have been some of the issues [for my company]" since the manufacturer began offering health care for the staff in 2006, Vazquez said.

Federal officials touting President Obama's proposal to overhaul the health care system said fixing the economy hinges on such changes.

"The status quo is not working," said Health and Human Services Secretary Kathleen Sebelius at a recent panel at Vazquez's company discussing health insurance issues with women who own small businesses.

Sebelius said that 10 years ago, 60 percent of small businesses provided health insurance coverage to employees, but that figure has dropped to 38 percent now, largely because of the rising cost of premiums.

In New Jersey, the average cost of an insurance policy for companies with two to 50 employees in 2007 rose by an average of 9.8 percent to $7,251 per employee, according to the most recent survey of health benefits done by the New Jersey Business & Industry Association in Trenton. The average cost increase for all companies was 9.4 percent.

The cost of premiums is a major focus of the proposal under discussion, said Sebelius, and the Obama administration hopes Congress will get a bill this summer.

Panel members, including employees, told Sebelius that employers and workers alike are affected by rising insurance costs. As companies lower the amounts they pay toward coverage, employees have to pay more and some opt to not take insurance.

Erica Rodriguez said she couldn't afford health insurance for the first three years she worked at Akwaaba Bed and Breakfast Inns in Brooklyn, which owns two bed and breakfasts in Cape May. She got a reality shock when she saw her brother's $5,000 bill for a two-day hospital stay.

"It's very imperative for businesses to have health insurance," she said.

Sebelius said a system of public providers would create a "health insurance marketplace" so employers with fewer workers could have the same leverage as larger businesses when negotiating premiums with insurers.

"I think choice and competition makes everybody sharper," and gives business owners an opportunity to control costs, said Monique Greenwood, Akwaaba owner and a panel member.

The New Jersey Chamber of Commerce in Trenton said on its Web site that its member - insurers, brokers, hospital executives and employers - are concerned a public-provider system could lead to a government-run plan that might suffer the problems of Medicare and Medicaid, including underpaying doctors and hospitals.

But at the event, panel and audience members supported the parts of the plan that propose subsidies to help business owners pay for premiums for the lowest-income workers and tax credits for owners of small businesses.