Wednesday, August 23, 2006
The Chamber has joined with other Montgomery County chambers to form the Montgomery County Council of Chambers. In turn the Council, along with the approval of chamber execs and Boards of Directors, has signed a contract with Texas Coalitions to assist small business owners who are seeking affordable health care coverage for their employees. It takes diligence to keep a small business running well. Of course, there’s the competition and the need for excellent staffing. There’s also the challenge of assuring the services we provide are high quality and improving. But perhaps the biggest challenge a small business owner faces is providing health insurance for employees. The cost of health insurance impacts every decision we make about hiring. I know that the cost impacts job creation in our community, because most small businesses factor in that cost in deciding whether they can or should hire someone else or just make do with the staff that’s in place.
An embarrassing reality is that Texas ranks last in the nation in insurance coverage. Over 28% of Texans under age 65 are uninsured. The Texas Department of Insurance reports that 66% of uninsured adults work, but either work for a firm that doesn’t offer insurance or they can’t afford the employee contribution required. Now, there’s a new option for small business owners to consider.
A State Comptroller’s study initiated in 2002 revealed that small employer groups, especially those under 10 employees, are generally charged extra, up to 20% by law, to offset the additional administrative cost incurred by insurance companies which insure these groups. It was determined that if two or more small employer groups could be combined into a “coalition” and treated as a single small employer, the additional administrative charges were reduced or eliminated.
Here is the good news, though, that came from that study. The Montgomery County Council of Chambers Health Coalition Program was made possible by the passage of HB 897 during the 2003 session of the Texas Legislature. It allows smaller employers with less than 50 employees to join together to form a coalition group and obtain rates from any small group insurance carrier offering coverage in Texas. Rates will be determined by the group census on age, sex, location, dependents and medical conditions.
Fifty-eight companies are participating in small employer health coalitions throughout Texas. The majority of these which had prior group health insurance are paying over $284,000 less per year, an average of over $10,000 per company or more than $2,600 per insured employee per year!
So, how are such savings possible? As it was explained, insurance companies are permitted to include additional “loads” in the rates for smaller employer groups to cover costs for administering these groups. The highest “loads” occur in groups of 2 – 9 insured employees which are as high as 20% by law. There are also “loads” for groups with 10 – 24 insured employees which vary in amount by insurance company. However, when groups of these sizes join together in a coalition, the administrative “loads” are not applicable, making it possible for coalition participants to realize lower rates. This can be significant savings to small business owners – many of who tell us health insurance costs takes a toll on the number of employees they can hire and their bottom line.
Joining forces with Texas Coalitions will not hurt our insurance carrier members at all. In fact, by their contract with Texas Coalitions, they will have options for their insured businesses who have struggled to keep up with rising insurance costs. Montgomery County was the first one in the state to combine to provide this coverage. Texas was the first state to provide this option, and two other states have now followed suit.
Click here to the Texas Coalitions website, www.texascoalitions.com, to learn more about the agreement. Insurance agents can contact Ron Mullen by emailing him, ron@texascoalitions.com, to learn more about becoming an agent through the coalitions program. More questions? Contact Anne, anne@magnoliatexas.org.
An embarrassing reality is that Texas ranks last in the nation in insurance coverage. Over 28% of Texans under age 65 are uninsured. The Texas Department of Insurance reports that 66% of uninsured adults work, but either work for a firm that doesn’t offer insurance or they can’t afford the employee contribution required. Now, there’s a new option for small business owners to consider.
A State Comptroller’s study initiated in 2002 revealed that small employer groups, especially those under 10 employees, are generally charged extra, up to 20% by law, to offset the additional administrative cost incurred by insurance companies which insure these groups. It was determined that if two or more small employer groups could be combined into a “coalition” and treated as a single small employer, the additional administrative charges were reduced or eliminated.
Here is the good news, though, that came from that study. The Montgomery County Council of Chambers Health Coalition Program was made possible by the passage of HB 897 during the 2003 session of the Texas Legislature. It allows smaller employers with less than 50 employees to join together to form a coalition group and obtain rates from any small group insurance carrier offering coverage in Texas. Rates will be determined by the group census on age, sex, location, dependents and medical conditions.
Fifty-eight companies are participating in small employer health coalitions throughout Texas. The majority of these which had prior group health insurance are paying over $284,000 less per year, an average of over $10,000 per company or more than $2,600 per insured employee per year!
So, how are such savings possible? As it was explained, insurance companies are permitted to include additional “loads” in the rates for smaller employer groups to cover costs for administering these groups. The highest “loads” occur in groups of 2 – 9 insured employees which are as high as 20% by law. There are also “loads” for groups with 10 – 24 insured employees which vary in amount by insurance company. However, when groups of these sizes join together in a coalition, the administrative “loads” are not applicable, making it possible for coalition participants to realize lower rates. This can be significant savings to small business owners – many of who tell us health insurance costs takes a toll on the number of employees they can hire and their bottom line.
Joining forces with Texas Coalitions will not hurt our insurance carrier members at all. In fact, by their contract with Texas Coalitions, they will have options for their insured businesses who have struggled to keep up with rising insurance costs. Montgomery County was the first one in the state to combine to provide this coverage. Texas was the first state to provide this option, and two other states have now followed suit.
Click here to the Texas Coalitions website, www.texascoalitions.com, to learn more about the agreement. Insurance agents can contact Ron Mullen by emailing him, ron@texascoalitions.com, to learn more about becoming an agent through the coalitions program. More questions? Contact Anne, anne@magnoliatexas.org.
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