Shelter from the storm

Steamboat Chamber prepares to launch innovative health insurance plan

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Kathy Stokes knows firsthand how difficult it can be for small-business owners to offer their employees the protective umbrella of health insurance benefits.

"There are a lot of people who would love to be able to offer it," Stokes said. "We do offer benefits, but there's only so much we can budget. We had to put together a private cafeteria plan. Then we had to hire someone to make sure all of the details were proper and everything was legal."

Stokes and her husband, Terry, are the owners of PostNet. Kathy also is president of the Steamboat Springs Chamber Resort Assoc--iation, which is preparing to offer its own health plan to members later this summer.

Insurance industry consultant Ed Pittaway said the Chamber's new plan offers an opportunity for Steamboat Springs to begin to take control of its health insurance future.

"This really is one of a kind," Pittaway said. "It could become a model for other rural communities in Colorado. It's as benevolent as I can imagine. There is something different and good for everyone who is (involved) in this."

The creative spark behind the plan involves immediately rewarding employees by reducing their insurance deductibles in return for leading measurably healthier lives. The payoff would come over the long term, Pittaway said, as those incentives allow the community to establish a track record of wellness that would translate into lower insurance premiums for employers and employees in the pool known as Steamboat Springs.

Today's reality

Even after small-business owners clear all the hurdles necessary to offer health benefits, they and their employees are often frustrated with premiums, deductibles and levels of coverage, Stokes said.

"We know many (business owners) have had to cease their group coverage," Chamber Executive Vice President Sandy Evans Hall said.

The Chamber's plan initially is meant to prevent further erosion and keep employers such as Stokes and her husband in the pool of area businesses that are able to offer benefits. In the mid-term, it's hoped it will allow employers who don't offer benefits to take that step.

The Chamber's plan has been several years in the making, and it was designed to take advantage of the fact that residents of Steamboat Springs tend to lead healthy lifestyles, Evans Hall said. That makes them a better risk for insurance carriers than the broader population.

"I think we have a pretty healthy community, overall," Evans Hall said. "All of those (qualities) help to lower (health plan) usage and keep premiums down."

However, today, people living in Routt County are lumped in with other communities in the geographic region by the insurance industry. Evans Hall and other people who worked on the Steamboat plan, including Pittaway and his associate, Catherine Matthewson, think the broader Steamboat community can establish its identity among health insurers.

"Our long-range goal is to create a group and be able to identify our (health plan) utilization patterns," Evans Hall said. Success could mean more favorable terms for people insured under the Chamber plan.

The two pieces of the Chamber health plan would offer employers the relatively lower cost of a plan with high deductibles. At the same time, they would allow individual employees in the plan to cut those deductibles substantially by earning credit for taking care of themselves -- being smoke-free, maintaining low cholesterol levels and managing high blood pressure, for example.

The plan is being offered in tandem by United Healthcare and Benicomp Advantage. United Healthcare also will offer a more traditional plan with copays.

Pittaway said the Chamber's steering committee thoroughly researched all the available options to it. The plan it chose, he thinks, is one that will resonate in the community.

"Our belief is that the community is a healthy, active vibrant community," and for those reasons, "the Chamber plan will be well-received and enjoy longer-term sustainability."

The Chamber's plan has been approved by the Colorado Division of Insurance.

Evans Hall thinks the Chamber plan will benefit the community in more than one way. In addition to offering employees an umbrella of protection, it should help employers retain their work force, she said. And it should promote healthy habits among employees by offering a financial incentive to do so, thereby increasing productivity.

She also wants to see employers in the plan take an active role in the future of the health plan.

The Chamber needs 50 "lives" -- employees of Cham--ber members and dependents enrolled in the plan -- to launch it this fall.

Stokes said the Chamber board understands that its members won't enroll out of team spirit. Employers would have to study the Chamber's plan and compare it to their current plans to understand whether it represents a good fit for their needs.

Pittaway said the Chamber plan won't reach critical mass until it enrolls 1,000 people. That's the threshold at which the pool of employees can begin to build the statistical foundation that will give them an identity of their own in the insurance industry.

Evans Hall ran the numbers on a preliminary version of the plan a year ago and concluded that she might have saved $5,000 on the health benefits offered to Chamber employees, thanks to initial deductibles in the range of $1,500 to $2,500.

However, by using their healthy lifestyle credits, her employees could have bought their deductible down to the range of $500.

Pittaway thinks employers here will find the Chamber's plan to be competitive, but he hopes pure numbers won't be the only basis for committing to the plan. He hopes people will consider it out of a philosophical commitment to the well-being of the community.

Stokes said small-business owners in situations similar to hers have to be highly motivated to put a private plan in place for their employees in today's private plan market.

"We have nine employees, and it's absolutely a family," Stokes said. "We're going to take care of that family -- that's part of the deal. If we can't take care of them, they have to go someplace else."

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