Part 1: Small and Struggling
KYW Regional Affairs Council
"The Small Business
Healthcare Headache"
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By Cherri Gregg
PHILADELPHIA (CBS) -- Every day, small business owners make a tough decisions about cash flow, how to attract employees, and whether to provide healthcare coverage. And for many businesses, those choices are one and the same.
President Obama has called small businesses the backbone of the American economy:
"Small businesses produce most of the new jobs in this country. They are the anchors of our Main Streets."
And that holds true in Pennsylvania. Companies that employ fewer than 50 people make up about 96 percent the Commonwealth's businesses.
But for smaller companies that want to compete with big businesses for the best and brightest workers, they often find that health care benefits are the battleground.
"Small business owners want to offer health coverage, but 86 percent of them who aren't able to do so say it's because of cost. And of those who are offering, 70 percent say they are struggling to do so," says John Arensmeyer (right), founder and CEO of the Small Business Majority, an advocacy group that represents the needs of small businesses nationwide.
"Small businesses pay 18 percent more than big businesses for the same policy," Arensmeyer notes. "A lot of that is because they don't have the negotiating power and there are administrative inefficiencies."
Philadelphia-area entrepreneur Ken Weinstein (top photo) owns the Trolley Car Diner in Mt. Airy, the Trolley Car Café in East Falls, and is a partner in Philly Office Retail, which has fewer than 10 employees.
"We as small business owners are trying to do the right thing by insuring our employees, but it's not always easy to do that," he tells KYW Newsradio.
Weinstein says that during the 15 years he's been in business, he's had to get creative to control costs:
"We provide health care coverage to our managers; other of our employees seek health care coverage elsewhere. Or we do offer a 'catastrophic' plan for them."
Even with the pared-down benefits, Weinstein says that altogether he spends nearly $100,000 a year on health care benefits.
"After our cost of food at the restaurants, it may be our largest expense," he notes.
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