Christine C. Quinn
Small Business Health Insurance: Making It Happen In New York City
Businesses – especially small businesses – are finding it increasingly difficult to provide health insurance for their employees, and not for lack of interest. In fact, most of the small business owners we’ve reached out to have told us that they want to provide coverage for their employees, they just can’t afford to. This is not surprising; the growth in the cost of employer- sponsored health insurance[pdf], (6.1% in 2007), continues to outpace that of earnings (3.7%) and inflation (2.6%), a trend that has remained consistent since 1999. If nothing is done, not only will New York City’s small businesses, which are crucial to the health of the local economy, become less competitive, we will also run the risk of leaving more New Yorkers out in the cold when it comes to access to quality, affordable healthcare.
For this reason, we have called for the expansion of HealthWorks, a Brooklyn-based health insurance program targeted to small businesses. Working with GHI, a New York health insurance provider, and a subsidy from New York State, the Brooklyn Chamber of Commerce has developed a program that provides affordable health insurance to 170 small businesses in Brooklyn. Because the program has been so effective, we will push to reserve money in this year’s budget to expand a similar model into other boroughs.
To be eligible for HealthWorks, a business must employ between 2 and 50 employees, 30% of whom must earn $36,500 or less per year. Qualifying businesses will be able to purchase an individual plan for $220 dollars per month, with a monthly cost to the city of $55, or a family plan for $691 dollars per month, with a monthly cost to the city of $162. Business owners will have the option of passing the cost on to their employees in whole or in part, though it is typical for businesses to pay 85-100% of the premium with the employees paying the remainder.
Though some of these details may change before HealthWorks is officially rolled out in Queens and Manhattan, we project that it will cost just under $5 million in its first year to cover 4,500 additional small business employees. We will not argue that this is not a lot of money – it is. But if we take a step back and look at the big picture, it becomes clear that we would get a lot in return for this investment.
Rising health insurance premiums put small businesses, as well as their employees, in a very difficult position. Small business owners are increasingly forced to choose between adding another worker and providing health insurance for their staff, or laying off an employee and cutting benefits. Likewise, employees at many small businesses are forced to change jobs – and possibly cities – in search of an employer that offers health insurance. With a modest investment by the city to offset the increasing pressure the cost of health insurance is putting on their bottom line, we can make it possible for businesses to hire more employees and more employees to stay in New York City.
Make no mistake – this is a temporary solution. There is no question that the rising cost of healthcare is one of the most pressing issues in the United States today, or that a massive overhaul of the healthcare system is urgently needed. But as elected officials, we have an obligation to protect our city’s families and ensure our local economy has what it needs to grow and thrive, and we can’t wait for the necessary reforms to take place. HealthWorks offers an affordable means to both of these ends.
Christine C. Quinn
Speaker, New York City Council
Chair, Health Committee
Chair, Small Business Committee