Healthcare: the precious benefit: how small business owners can combat rising costs.

Author:Walker, Andrea

In the current national and local economy, health insurance has moved from being a standard to a luxury many cannot afford. For small businesses in Michigan, rises in health care costs have caused employers to be creative with their benefits or face the prospect of not being able to afford health care coverage for their employees.

In 2003, Small Group Market Rating Reform was passed in Michigan, establishing rate bands in the small group health insurance market for businesses that employ between two and 50 employees. The Public Act 88 of 2003 requires that all Michigan health insurance carriers offer small groups rates within a set percentage of their index rate.

"The reform helped to stabilize the costs behind the health care market and help us evaluate future health care costs," said Ken Dallafior, senior vice president of group sales and corporate marketing for Blue Cross Blue Shield of Michigan.

Besides working for a more stable market, the Chamber and Blue Cross Blue Shield (BCBS) also collaborated to develop products that lowered costs as well as created a healthier population. In 2007, the Detroit Regional Chamber and Blue Care Network teamed up to create Healthy Blue Living, an innovative new program that combined premium savings and incentives for wellness. Healthy Blue Living is just one of the many programs designed to give a reduction in premium costs to employers. Healthy Blue Living focuses on behavior modification and accountability. While health coverage is the same for all Healthy Blue Living members, there are two levels of copayments and deductibles. Members who try to improve their health status enjoy lower copays and deductibles (enhanced benefit level) than those who do not (standard benefit level). Driven towards wellness, the plan lowers the cost of premiums by evaluating the health of employees and assisting in wellness and healthy living plans. These plans promote wellness to employees through financial incentives, lowering costs to both the employer and the employee. BCBS also has a program that offers some discounts for small employer groups when dental and/or prescription drugs coverage is added to their benefit plan, recognizing that total body coverage helps employers manage healthier workforces.

Many carriers have embraced the concept of rewarding healthy behaviors and have begun to come out with their own versions. But a common trend among employers is still to pursue lower premiums through increased use of...

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