A Small Employer's Campaign to Reform Health Care

Posted by: Greg T. Spielberg on June 30, 2009

insured_tee_crop.jpgLike most business owners, BusinessWeek reader Mike Draper is concerned about balancing his employees’ health benefits with his business’ expenses. In 2006, after paying out of pocket at a county hospital, he voiced his own sentiment by designing a shirt for his Des Moines, Iowa-based custom screen-printing company that reads: “America: Only the Insured Survive.” His company, SMASH, which he expects to top $1 million in gross sales this year for the first time, pays 100% of the health insurance premiums for his seven employees working more than 30 hours a week. Right now, Draper says, “they’re all unmarried 20-somethings, but in five years, when everyone needs family policies, we might be in a little bit of trouble.”

On Wednesday, June 23, Draper got a chance to express his concern through more than just organic cotton. He testified in front of three government committees in Washington as a representative for the New Hampshire-based Main Street Alliance, a network of small-business coalitions in support of health care reform (he is not a member). Central to his testimony was Draper’s support of a government-run public insurance option. “I’m not in the bag for one person or the other. I’m just there because I run the numbers and it’s the only viable alternative for the future,” he says. Health care coverage eats up between 6% and 24% of SMASH’s yearly payroll costs, a commitment Drapers would love to lower, or at least stabilize. A bill, authored by the House Committees on Ways and Means, Energy and Commerce and Education and Labor, is kicking around the House and would require businesses to insure their workers or face a tax equal to 8% of their payroll. The tax would then be re-distributed back to employees who could then chose from private or public insurance options.

Another government levy, of course, isn’t what attracts Draper to mandatory care and the public option plan. Instead, it’s the consistent, flat rate that would give him some year-to-year budgeting peace of mind. Because, to add to what a former small-business owner once said, death and taxes are certain, but these days so are rising insurance premiums.

For more, take a look at our recent story on the four biggest issues for small employers in the ongoing health-care debate.

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Then we invite you to participate in a BusinessWeek special project. We’re producing an online report this summer that will culminate in a double issue of our magazine in August that we’re calling The Case for Optimism.

We’re polling small business leaders, including our readers, for economic signs of life. The six most insightful reader submissions will appear in August’s double issue. To read Mike Draper’s comment and contribute your own indicators of an economic turnaround in your business or industry, visit our Case for Optimism blog.

Reader Comments

Bob Ramos

July 1, 2009 02:27 PM

As long as America has young people like Mike Draper, our best years are yet to come.

As a small business owner, I very much agree with Mike. If I know that I will have a known liability like up to 8% of my payroll, I can better plan my business operations such as cash flow, prices, etc.

Because of the "fickle" nature of the workforce, for example, my son is convinced that he is invincible, I am very much in favor of a mandatory universal health care system. Also, I very much hate it when certain people classify such a system as socialism. I simple do not care what political system it falls under. The test is, does the plan work? If it does, end of story.

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What's it like to run your own company today? Entrepreneurs face multiple hurdles new and old, from raising capital and managing employees to keeping up with technology and competing in a global marketplace. In this blog, the Small Business channel's John Tozzi and Nick Leiber discuss the news, trends, and ideas that matter to small business owners. Follow them on Twitter @newentrepreneur.

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