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March 12, 2010

Small-biz owners looking for insurance relief

By Paul Leighton

SALEM — Small business owners who have been hit hard by rising health insurance costs will look to Gov. Deval Patrick for help this morning in Salem.

About 14 local owners of small businesses are expected to meet with Patrick at the Enterprise Center at Salem State College.

"They will simply talk about what terrible pain (health insurance) inflicts on their company," said Christine Sullivan, executive director of the Enterprise Center, which provides programs for small businesses on the North Shore.

Sullivan said the high cost of health insurance is preventing small businesses from hiring workers and discouraging would-be entrepreneurs from starting their own businesses.

Sullivan testified on the issue earlier this month at a hearing held by the state insurance commissioner in Lawrence. In her testimony, she included messages from 35 small business owners about how insurance costs have adversely affected them.

Paula Gravallese, who owns Caffe Graziani in Salem along with her husband, Giovanni Graziani, said their health insurance costs have gone up 400 percent since they opened the cafe 19 years ago.

Gravallese said she and her husband paid $1,118 per month last year for a family plan that covered them and their two children. They recently switched to a less expensive plan, but it has higher deductibles and co-pays and no prescription drug coverage.

"I thank my lucky stars we're a healthy family," Gravallese said.

Sullivan said small businesses are vulnerable because they lack the power of larger companies to negotiate for lower health insurance rates. The solution, she said, is for Massachusetts to allow small businesses to negotiate as a group, as the state of New York does.

"Why shouldn't the little guys be on equal footing when it comes to health insurance?" Sullivan said. "There's no equity."

The comments Sullivan received from small business owners reveal the variety of ways high health insurance costs are affecting companies.

Christopher Benoit, co-founder of Beverly biotechnology company Enzymatics, said health care coverage is his company's second-highest expense, behind payroll. He said his company, which has 20 employees, has been paying 100 percent of his staff's expenses, but plans to reduce that to 50 percent.

Joanne D'Alessandro, who owns Hestia Creations, a gift store in Marblehead, said in her message to the state insurance commission that she is "very close to closing a 24-year business" due to health insurance costs.

"Please change your policies for small businesses before it is too late!" she wrote.

Patrick meets with business owners at 10 a.m. at the Enterprise Center.

Staff writer Paul Leighton can be reached at 978-338-2675 or by e-mail at pleighton@salemnews.com.

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