Tennessee small businesses work to extend health insurance coverage

Small business owners in the state made headway last year on health coverage, and they know it.

Now, they're marshaling steam for extensions to CoverTN, the insurance program that beginning this year will offer coverage to the most vulnerable workers in firms with 25 or fewer employees.

The buzz was in the air last week at the annual legislative mixer the National Federation of Independent Business sponsors in Shelby County.

"CoverTN opens the door to continual debate and conversation," said Gary Selvy, NFIB state director. "The legislators I've spoken to are more than anxious to continue the conversation about health care."

NFIB has 10,000 members in Tennessee, plus offices in every state capital in the nation. In Tennessee, its legislative agenda mimics the nation's worries over health care costs. But members here are also applying pressure in Nashville for regulatory flexibility and tort reform, saying even the threat of a lawsuit can doom a small business.

Jim and Austin Baker, the father-son team that owns Owen Brennan's restaurant, are pressing for regulatory flexibility to become law in Tennessee.

Essentially, the federal mandate says that governmental bodies must study the impact of their rulings on small businesses before they become law.

While Gov. Phil Bredesen signed an executive order to that effect last summer, it does not have the effect of law.

"Reg flex affects more small businesses than people realize," said Austin Baker, who cites the example of what can happen when a regulatory agency losing its state funding. "It incentivizes them to fine to make up the income."

The practice, he said, stands to disproportionately affect small businesses, including the majority of all restaurants.

While small owners agree, the larger issue is the ability to join associated health plans, letting them partner with small businesses across the region for better premiums.

"We have 90 employees and we pay 50 percent of their insurance premiums," said Mark White, co-owner of Grand Events & Party Rentals.

Because CoverTN was designed to cover the most vulnerable working poor first, many small business owners will get no relief because their employee pay surpasses the guidelines.

None of White's workers qualifies. He pays $16,000 a month to insure them, double what it cost five years ago.

"I'm interviewing two people right now. Their No. 1 question is what kind of health care do you provide."

The rub for small business owners is that without health insurance, it's hard to find good employees.

"If you drop your coverage, your valuable people will go to larger firms," he said.

CoverTN premiums are expected to average $150 a month, based on age, weight and if the insured uses tobacco. The cost will be split among the state, employer and employee.

Blue Cross Blue Shield will provide the coverage. As many as 100,000 Tennesseans could be participating in three years, offsetting a portion of the population left without coverage in the TennCare cuts last year.

To function, the overall program, which includes options for children and people with serious health problems, needs 100,000 to 150,000 of the state's estimated 747,000 uninsured residents to join.

About 104,000 Shelby County residents of all ages have no health coverage.

Since CoverTN pre-qualification began in October, 2,600 businesses have met eligibility standards.

"We anticipate that we will start taking applications in mid-February from the working uninsured at these businesses and others that pre-qualify," said Lola Potter, CoverTN spokeswoman. "We aim to have people enrolled and receiving benefits by the end of March."

By that time, Kelly Dobbins, owner of Mid-South Drug Testing, expects she will be among the uninsured.

Because she has a pre-existing condition, the insurance companies she's talked to aren't interested in her business.

"When you're in a small business, the insurance companies look at every employee individually," Dobbins said. "I'm the liability. If we were a big firm, they'd have more employees on the policy, which would even out their risk."