Life Insurance Blog News: Businessman Pleads With State To Help Fight Off Health Insurance Hikes

Mar. 5–HAVERHILL — Jeff Linehan said he can’t take it anymore.

Rising health insurance costs for employees have put financial pressure on his business, but he’s always found a way to make ends meet — until now.

He has received a notice from his health insurance company that his costs are increasing 46 percent this year. Facing such a big increase, he has been searching for the right people to help him and other businesspeople fight off what he calls crippling costs.

Yesterday, Linehan, owner and operator of Diversified Business Systems in Haverhill, shared his frustrations with acting Insurance Commissioner Joseph Murphy, who held a public hearing at Northern Essex Community College’s Lawrence campus. Linehan said Murphy listened and took notes.

The hearing was among several Murphy is having statewide. The purpose of the hearings, according to a press release sent out by the state Division of Insurance, “is to afford all interested persons an opportunity to provide oral and/or written comment regarding the rising costs of health insurance premiums, particularly for small businesses and individuals.”

Hearings have been held in Barnstable, Boston, Pittsfield and Lawrence. Others are scheduled for 1 p.m. today at Framingham State College and 11 a.m. Monday at Fitchburg State College.

Diversified Business Systems, off Hilldale Avenue, has been in business for 41 years and employs 60 workers, Linehan said.

“Four days ago, our health insurance increased 46 percent through Blue Cross Blue Shield of Massachusetts,” he said yesterday. “The reason for the increase from our insurance company is that our employees are getting older.

“It now costs $22,829.52 to insure an employee for a year,” he said. “We pay half the insurance, so for an employee making $32,000 per year, they pay more than one-third of their salary for health insurance.”

While the costs have soared, Linehan said his company’s insurance coverage has not. Co-payments have risen as well, he said.

“Our overall deductible has risen from $1,000 per year per person to $1,500 per year per person,” he said. “We have priced out our insurance with Harvard, Tufts and Fallon. All have similar increases, some even higher.”

Linehan suggested that allowing more insurance companies to compete for health care policies might bring about lower rates. Regulating drug costs might also help, he said.

Limiting medical malpractice awards is yet another step that might reduce health care costs, he said.

Linehan and other business owners who employ more than 11 full-time employees are required by Massachusetts’ health care law to offer health insurance to their workers.

Tom Archambault, who recently opened up Archie’s Place restaurant at the former location of Cheerleaders on Washington Street, said he looked into providing health coverage for his workers.

Archie’s has fewer than 11 full-time workers, so the business is not required to offer medical coverage. Archambault, however, wanted to help his employees. He said he found he could not afford it.

“The costs were astronomical,” he said.

Source: Thomson Business Intelligence; The Eagle-Tribune

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