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Managing health care costs

Health insurance is an increasingly contentious issue for franchisees, especially at this time of economic hardship. With premiums on group policies up by almost 30% in some places and insurer consolidation making fewer policies available, healthcare has become an incredibly stressful subject for small business owners and entrepreneurs, so much so that it was rated as their top headache last year.

The healthcare crunch leaves business owners having to contemplate laying-off staff in order to cover other workers. Some business owners are foregoing health care completely --- with the number of businesses choosing not to provide health care up 8% last year, according to a recent survey.

President Obama promised health care reform in the run-up to the election, but one feels that the pressing needs of the economy, not to mention troubling foreign issues, might sidetrack his best intentions. So what is a franchisee to do?

This recent article addresses the problems and discusses some measures that small business owners are taking.

Some entrepreneurs are introducing a longer waiting period before employees can avail of health care.

Others, like Lynchburg, Virginia’s Thomas Johnson, are paying for their staff's medical costs directly. It’s a risky strategy but it has yet to backfire.

"By picking up the tab for medical bills, according to some legal experts, Johnson has set a precedent that could obligate him to pay for all his workers' medical expenses - even for a catastrophic illness such as cancer, which typically costs hundreds of thousands of dollars to treat."

Then there’s Debbie Wicker, who found a loophole in health insurance law to ensure that everyone in her internet publishing business is covered.

And finally, other companies are penalizing workers who smoke or are overweight with higher premiums.

These are just a few examples of small business owners are doing to cope with this crisis. Unfortunately, there is no silver bullet at the moment for solving this problem. With no immediate solutions on the cards for the health care coverage, franchisees will need to think innovatively about ways to provide for the health care needs staff.

How has your business been dealing with this conundrum?

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