Up at 5AM: The 5AM Solutions Blog

New and Better Ways

Posted on Tue, Oct 06, 2009 @ 12:51 PM

Here at 5AM, we provide full medical insurance coverage for employees and their families – we cover 100% of premiums and deductibles. Job candidates and employees both understand this as a pretty nice, and unusual, benefit for a company of our size to offer.

Every year at this time, our insurance company notifies us of the impending end-of-contract rate hikes, and we work with our broker to shop around to ensure we’re competitive in the coverage and the cost.

This year, our non-profit health insurance provider notified us that they were raising their prices by 34%. No, that’s not a typo – 34%. This, without much explanation except the friendly reminder that they’re “always seeking new and better ways to contain costs” – raising rates 34% sure IS a good way to, er, contain costs.

In the past, the rate hikes we endured were typically in the 10-18% range. We didn’t budget this 34%, but we’re sticking to our guns and will continue to offer full coverage to our employees because we believe they and their families should have access to health care and that we as a company are in the position, and have somewhat of an imperative, to provide it.

Why do we feel obligated? Well, because one of our founding tenets is that collectively we have more power than we do individually. This holds true in how we perform our work here (in teams), and it theoretically holds true that we can group ourselves together to obtain better prices and benefits in all sorts of areas, including and especially health insurance And we feel obligated because in our type of company, health insurance is not so much a benefit as a requirement, and the “benefit” comes in the quality of the offering and the amount the company will pay, not in the offering of the insurance itself.

In the confluence of this hoarding/avaricious rate hike, and with the current health care debate and its question (promise?) of a “public option,” I flashed back to nearly five years ago, when three rather large companies called on President Bush because they feared that the cost of providing health insurance to their employees would crush them.

Among its other burdens, GM pays nearly $6 billion per year on health insurance for its current and retired employees (adding about $1500 to the price of each car). It’s estimated that small businesses like ours will pay nearly $2.4 trillion dollars over the next ten years in health care costs for their workers. We’ve been talking about this problem long enough, lining countless pockets and doing not much as the number of uninsured grows.

Aren’t we greater than the sum or our parts? Isn’t there power in a collective? We sure believe that at 5AM, and with another year of unexplained and apparently disproportional rate hikes to provide our employees with something so basic as medical care, we’re sure ready for new options.

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