A 'good sense' alternative for employee health coverage by ProQuest


More Info
A ‘good sense’ alternative for employee health coverage
Professional employer organizations gaining clout, but at a slow rate                                                             the rise, according to the state Department of              they’re not attracting swarms of businesses.
                                                                                                                                  Labor and Workforce Development.                                  PEOs had 3,021 New Jersey companies as
              by martin c. daks                               Employee Benefits                                                         In 2007, there were 120 different PEOs doing          clients in 2007, Smith said. In 2008, that number
IN THE NINE YEARS that Melba Bonelli has                                                                                          business in the state, and there were 135 in 2008.          had grown to 3,225; this year, so far, the toal has
run Dental Choice P.C., the Marlton dentist has         cally take on a small business’ employees and                             This year, the number has grown to 146, accord-             reached 3,323 companies. That’s a fraction of
been frustrated by health care costs. President         handle human resources duties, such as payroll                            ing to Kevin Smith, a department spokesman.                 the 268,237 businesses operating in New Jersey,
Barack Obama says he has a solution, but some           and benefits management, may be an alter-                                       “If you’re a 20-employee business, you’ve             according to the state Department of Labor.
people say an alternative already exists: profes-       native. Sheridan is chief marketing officer of                            got no leverage with insurance carriers,” Sheri-                  The relatively slow growth of PEOs in the
sional employer organizations, or PEOs.                 Extensis, a Woodbridge-based PEO.                                         dan said. “You’ll probably be able to get some              state doesn’t surprise John Sarno, president of
     “I’ve never been able to find a plan with rea-          Under a PEO, workers from multiple small                                                                                         the Livingston-based Employers Association of
sonable coverage and premiums that my employ-           businesses are typically aggregated under a sin-                                                                                      New Jersey.
ees can afford,” said Bonelli, who has 10 people        gle PEO-employer, giving the organization some                               “We get more services at a                                     “Many PEOs could not keep their promise
— including part-timers who she said are not            degree of leverage when it comes to negotiating                             competitive price. ... We can                             to keep down the increases in health care insur-
currently eligible for employer-sponsored cover-        health care insurance costs.                                                                                                          ance costs,” he said. “They could moderate them
age — on her payroll. “So right now we’re on a               “We’ve been enrolled in a PEO plan for                               focus on our business, instead of                           for a year or two, but as a company’s claims rose,
low-premium, high-deductible plan that forces           the past two-and-a-half years, starting when we                             worrying about paperwork.”                                so did the costs.”
covered employees to pay up to $4,500 out of            only had four employees,” said Dave Klockner,                                      Dave Klockner, Eneractive Solutions                      Bonelli supports Obama’s proposed public
pocket before the coverage kicks in.”                   vice president of operations at Eneractive Solu-                                                                                      health plan, as does Kelly Conklin, a co-owner
     Her frustration, which is echoed by many           tions, an Asbury Park-based energy engineer-                                                                                          of Foley-Waite Associates Inc., an architectural
small-business owners that say they’re strug-           ing and project development company that                                  sort of coverage [through the New Jersey Small              woodworking shop in Bloomfield.
gling with health care insurance choices, has           now has 10 employees. “Extensis’ benefits make                            Employer Health Benefits Program] but then                        “Small businesses have no bargaining
helped spur Obama to call for a so-called public        good sense for us.”                                                       your rating will be based on a ‘community’ of               power with insurance carriers,” Conklin said.
insurance plan, open to everyone and backed                  Besides the health care savings, Extensis                            similar businesses [with demographic character-             Foley-Waite has 13 employees, 10 of whom are
by the federal government, that would compete           runs the company’s 401(k) plan, which Klock-                              istics] that may or may not drive up your rate.”            covered by a health plan that costs the company
with privately managed plans.                           ner said would be otherwise too cumbersome                                      Extensis has 8,500 so-called worksite                 about $6,000 a month, Conklin said.
     It’s a controversial idea that has generated       for his small business.                                                   employees; most are in New Jersey, with 6,500                     But Conklin decided against joining a PEO.
opposition from national health insurance trade              “We get more services at a competitive                               signed up for health care plans, at rates that                    “We’ve been approached by 
To top