"DUE TO THE crushing increases in premiums, I was faced with choosing one or both of the following this year: significantly raising the insurance deductible to reduce the premium, or implementing payroll deductions to help offset the cost," said Geoff Gaunt, the owner of Providence Picture Frame.
Geoff Gaunt is the owner of Providence Picture Frame, which he says is the oldest framing business in the country. He arranged for his shop to host the second annual birthday party for the Affordable Care Act. At the event, he talked about the importance, from a business perspective, that the new tax credit available to small businesses to offset health insurance costs from providing employees with insurance coverage.
Providence Business News asked Gaunt to explain in detail why he believes that offering health insurance to his employees is a good business strategy.
PBN: As a small-business owner, how has the Small Business Health Insurance tax credit supported your ability to provide your employees with health insurance benefits?
GAUNT: For our full-time employees, who have been with us for at least a year, we’ve historically paid 100 percent of their medical insurance and dental.
We do have some employees, covered elsewhere (e.g., covered under their spouse’s plan), who elect not to get it; but, anyone who needs it, gets it. This is a top-shelf, $250 deductible plan.
However, due to the crushing increases in premiums, I was faced with choosing one or both of the following this year: significantly raising the insurance deductible to reduce the premium, or implementing payroll deductions to help offset the cost.
The tax credits have allowed me to hold the line on this benefit.
PBN: Since 2008, how much has your health insurance premiums gone up each year?
GAUNT: The short answer is 12-18 percent each year, over the past five years. However, I need to qualify that by saying that the only constant is the deductible. Over the past several years, most diagnostic tests, which never used to hit your deductible, now do, and most co-pays have also increased. So, this is above and beyond increases I’ve stated.
Also, as a small employer, it does not take much to cause a demographic change in your pool, causing a dramatic swing in rates. As I mentioned in my talk [at the event], we once had a 28 percent increase!
PBN: What role did your accountants, YKSM, play in helping you receive the tax credit?
GAUNT: Honestly, I’m too busy trying to do the best job I can for my customers, my staff and my business to have even noticed that this was an option. Thankfully, YKSM cares as much about their clients as I do for mine. I give them 100 percent of the credit for my receiving the benefit from this.
PBN: How does “investing” in your employees with health benefits given you a competitive edge?
GAUNT: First of all, it is the right thing to do, and I wish I could do it for all of them. Obviously, from an employee retention perspective, good benefits generally help you keep good staff. But good health care, in particular, is becoming almost as important as salary when employees decide whether or not they are being taken care of. So, as someone who needs to keep his skilled employees, yes, it helps me compete more effectively against others in our industry.
PBN: What do you think business community could do better in promoting the tax credits?
GAUNT: Exactly what we are doing now... talk about it. This is a very good thing, but more importantly, it has brought me closer to the national discussion on the issue and has created an opportunity for us, as local business leaders, to focus on this together.
Providence Picture Frame,
Affordable Care Act,