Oct 13, 2023
Small businesses take big steps to tackle rising costs
How the state’s largest health care cooperative and health plan are working together to make health care more affordable in the Commonwealth
Small business owners are facing steep challenges these days – including rising health care costs – and some are turning to the state’s largest nonprofit insurer for support.
“The cost of everything is going up,” said Bob Katz, President and CEO of My Grandma’s of New England Coffee Cake company, who noted that he is spending dramatically more on ingredients, boxes and shipping for his well-known (and delicious) cakes. “It’s crazy what’s happening right now.”
Jerry Michelson, the fourth-generation co-owner of Michelson’s Shoes with locations in Lexington and Needham Center, Mass., said he feels “the rising costs of opening our doors every day,” from flipping on the lights to ordering inventory to paying for employee health benefits.
National and local trends of rising medical costs contribute to the pinch these small businesses feel.
At the same time, a tight labor market means small businesses are competing with large companies to attract and retain top talent.
“Right now, having a quality workforce is a top priority of most small businesses because without that, they won’t get the repeat business they depend on. That means competing with much larger companies by offering top-tier benefits, including health benefits,” said Jon Hurst, president and CEO of the Retailers Association of Massachusetts.
A cooperative approach to health care coverage
RAM, which was founded more than a century ago, represents 4,000 retailers in Massachusetts, the vast majority of which are small businesses, with increasingly more women and minority-owned businesses.
RAM Membership Director Andi Shea said one of the key reasons retailers join the association is to participate in its Health Insurance Cooperative, which has partnered with Blue Cross Blue Shield of Massachusetts since 2012 to offer health care coverage and other benefits to employees of RAM businesses.
By far the biggest benefit of joining RAM, Michelson says, is that small businesses like his can increase their purchasing power, for example, by offering the kind of health care benefits you might see at larger companies while receiving lower annual premium increases than they could get on their own.
There’s always pressure running a small business, and you need all the help you can get
- Jerry Michelson, co-owner of Michelson's Shoes
Neil Abramson, CFO of ECI Stores, agrees. ECI Stores’ consignment shops offer kids’, teens’ and ladies’ clothing, as well as furniture and home décor.
“RAM offers us a suite of benefits at a price that would rival anybody,” he said. “People are surprised to see a small business offer benefits, and when they find out that we offer health insurance through Blue Cross, the universally recognized gold standard, they are really surprised.”
Finding solutions
As health care costs continue to rise, RAM and Blue Cross are working together to enhance the benefits offered.
“Blue Cross is committed to working with us on new and innovative ways to help moderate the rise in health care costs for our members,” Hurst said.
“Small businesses are a vital part of the economic engine of the commonwealth,” said Blue Cross’ Head of Commercial & National Markets Erin Lenox.
We understand the strains small businesses are facing, and we will continue to work with RAM to provide high-quality, affordable health plans for the valued employees of their member businesses.
Erin Lenox
Choosing from Blue Cross’ portfolio of small group plans, RAM businesses can select which to offer their employees.
“Employers are looking for that choice,” Shea said. “Having the flexibility to choose from the different Blue Cross plan options enables each business to decide what works best for them.”
All plans come with Blue Cross' broad network of 75,000 clinicians, as well as the Healthy Actions wellness program, which rewards employees and their employers when employees take steps to be healthy, and other benefits — such as dental, vision, an employee assistance program, life insurance and accident coverage.
Employers also have access to health financial accounts, including health savings accounts, to help employees cover out-of-pocket costs.
Abramson says he prioritizes mental health and wellness when selecting benefits for his ECI Stores staff.
“There’s so many things Blue Cross brings to the table—they’re our partner in a complete suite of products,” he said. “Especially as we come out of this pandemic, mental health is something you can’t shortchange. Our plans cover that. And the Healthy Actions program is huge because it gets old guys like me off the chair and to our doctor to check in so we’re catching things early before they become an emergency. It is a great way to keep our team healthy and fit with small steps.”
It’s in everyone’s best interest to ensure the financial health of small businesses, said Hurst, who notes his own passion for retail reaches back to his grandfather, who owned a small hunting, fishing and hardware business in New Hampshire.
If small businesses go away, it would be devastating for our communities and our main streets and for future generations. That’s why we’re working together to ensure the viability of small business in the Commonwealth
Retailers Association of Massachusetts President Jon Hurst
Michael Buckley contributed to this report.
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