Providing health insurance can be a challenge for San Joaquin County’s small businesses

Feb. 25-- Feb. 25--STOCKTON -- Providing employer-sponsored health insurance presents a conundrum for many small businesses. The expense has little to do with contributing directly to the bottom line, but it's proven to be good for attracting and retaining skilled workers.

A recent survey of employers who use the Covered California for Small Business exchange indicated that prospective employees expect to be offered health insurance. After salary, health insurance is the next consideration employees use to base their decisions on whether they work for one employer over another, the survey showed.

However, for employers offering at or near minimum wage to their workers and struggling with all the hurdles of just keeping the doors open and the lights on, health insurance is barely on the table.

"If you are a small business, you have no buying power whatsoever. We are at the mercy of the insurance companies," said Mike Letizia, president and CEO of Stockton-based Letizia HR Solutions Inc., who described his two-person shop as a full-scope human resources service provider. Letizia himself has more than 30 years' experience in human resources, much of that time spent with a local bank.

Small employers with less than 50 full-time-equivalent workers are exempt from the federal mandate that they must provide coverage to their workers. But there is still an incentive for some if they do provide employer-sponsored coverage.

The Small Business Health Care Tax Credit is equal to 50 percent of the premiums paid by an eligible business with less than 25 employees. So if the business shells out $15,000 in premium costs, it could be entitled to a $7,500 tax credit from the Internal Revenue Service.

Businesses do have the option of enrolling with Covered California for Small Business, or CCSB, part of California's State Health Benefit Exchange where employers with 100 or fewer workers can access health plans that are relatively affordable.

CCSB currently offers five plans, including two preferred provider organization (PPO) plans from Blue Shield of California and Health Net, and two health maintenance organization (HMO) plans that are provider- and hospital-based from Kaiser Permanente and Blue Shield.

For employers concerned about premiums, Covered California spokesman James Scullary said "there is no business too small for our plans, and CCSB is seeing a substantial increase in the lower end of small businesses -- in the two- to 10-employee range -- now offering health insurance. Interested employers can visit CoveredCA.com or call us at (844) 332-8384 for more information."

Letizia won't be one of those calling, however.

"I would really love to offer my employee health benefits," he said. "But Covered California does not measure up. That's not health coverage, at least certainly not what I am used to," Letizia said, referring to what he described as low-premium "catastrophic policies" with "unrealistic" four-figure deductibles.

"The quality of health care I received 15 to 20 years ago simply does not exist today," he said.

While CCSB may be attracting more small business operations, a recent random survey of independent businesses in one Stockton shopping center did not find a single employer offering coverage through the state exchange. In fact, the results were startlingly consistent. Not a single employer in the center offers health insurance benefits, period.

One simply said, "No insurance," waving off further questions. Another noted his status as a military veteran eligible for VA health care.

Several employees shared that they were receiving government-funded Medi-Cal (California's version of federal Medicaid benefits) through Health Plan of San Joaquin. Even though they were all working, they met the income eligibility requirements because of their low wages.

Muhammad Sultan, 55, who holds a master's degree in geography and worked as a high school principal in his native Pakistan before moving to San Joaquin County in 2010, now works in a friend's smoke shop. He has Medi-Cal for his entire family of five, including his oldest child who also works.

"I like it. It works for me," Sultan said. "We are happy with Health Plan of San Joaquin and have no problems. I can pick any doctor with no problem."

Contact reporter Joe Goldeen at (209) 546-8278 or [email protected]. Follow him on Twitter @JoeGoldeen.

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