For this week’s Ask the Industry, we look at an issue that is on nearly everyone’s mind these days – healthcare. It has become such a critical concern, both for business owners and employees, that the Motor & Equipment Manufacturers Association (MEMA) recently developed the Health Care Working Group, to assist its members in addressing the issue.

Based on the model of MEMA’s successful Brand Protection Council, the Health Care Working Group began meeting this past year, under the direction of Ann McCullough, MEMA’s director of external affairs. According to McCullough, about 25 companies, both large and small, expressed an interest in participating in the group.

“MEMA’s market segment members have been expressing concern over healthcare costs for a number of years, and through our government affairs committee, we decided there needed to be a little bit of extra attention given to healthcare issues. The idea was formed to put together what we call a Health Care Working Group that is open to members of MEMA’s market segment associations. It gives our members a chance to get together periodically throughout the year to do a couple of things: focus on legislation in Washington that is impacting healthcare reform; to offer the automotive and heavy-duty supplier community a chance to get together and form its opinion on healthcare reform; and then also to give companies a change to benchmark and network and see what is working for them as individual companies in terms of reducing their individual healthcare costs. For example, if one company is implementing a wellness program and has had success they can share that with the other companies that are participating and really just be resources for each other,” said McCullough.”

“Everyone is impacted by healthcare costs,” McCullough added. “Certainly if you have a larger employee/retiree population, that’s one set of issues, but if you are a smaller company I think you really feel the impacts of bottom-line healthcare costs just as much.”

Penray, a maker of specialty automotive chemicals, said that healthcare is an important, and costly, component in its employee benefits package. As such, the company addresses healthcare from a three-pronged approach, according to the company’s president, Rod McKenzie.

“Healthcare is a very important and expensive part of Penray’s benefit program,” said McKenzie. “We believe healthcare has to be attacked from three separate angles: 1) positive good health programs that encourage employees to maintain their health, 2) education on how much healthcare really costs and how employees can play a part in keeping increases to a minimum, and 3) customized insurance programs that support the major needs of our employees.

“We sponsor and support a number of programs that encourage good health. For example, Penray had a company-wide walking program where all participants received a pedometer, logged and reported miles and received monetary awards. We also sponsored a health screening that included a blood pressure check, cholesterol screening and a health questionnaire. We had over 90 percent participation. To follow up on individual results, presentations were given on eating, exercising and the effects of smoking.

“As part of the growing initiative of consumer driven health plans and ever increasing insurance premiums, we incorporated a health reimbursement account in connection with a high deductible plan in 2006. Penray shares the cost with the employee by paying 70 percent of the premium. We have two tiers of premiums based on an employees’ annual compensation.

McKenzie added that in order to keep healthcare increases to a minimum, the company reviews its total health insurance program every year and tries to focus on wellness and prevention.

“We keep abreast of any new health insurance concepts and try to determine if the program will be both understandable and beneficial to the employee and the company when considering them,” said McKenzie. “In the end, if the employee understands the real cost, and is given the power to ‘shop’ for more cost-effective treatment programs, we all benefit. That, along with maintaining a healthy lifestyle, will lead to a true win-win situation.”

According to McCullough, many members of MEMA’s Health Care Working Group are thinking along those same lines.

“I think certainly they are looking at how to address healthcare costs overall,” she said. “I would say the other issue that keeps coming up is quality – how to improve quality in the healthcare system. I realize that those are big terms and not all of that can be addressed by legislation for example, but those are the areas that I think are members have the most concern. [And, we’re looking at] translating that into something can be an action item on Capitol Hill. A lot of companies do have disease management and wellness programs, for example, and one of the things we’ve talked about is the idea of a tax credit for these programs. Employers could be given a little incentive for having these programs in place, really working to keep their employee population healthy and avoiding some of the largest cost factors – when you look at healthcare costs in terms of cardiac conditions, diabetes, smoking cessation, etc. That’s just one item we’re looking at legislatively and certainly we hope to put ourselves in a position to react to the number of proposals that we think will be coming out in this Congress and through the presidential election.“

Jennifer Tio, president of Maximum Marketing Services, Inc., an integrated marketing and communications firm that serves aftermarket clients, agrees that cost is among the primary concerns regarding healthcare today. Her company also looks at wellness programs and flex plans as a way to keep costs down.

“Healthcare insurance is one of the most expensive, and ever-increasing, costs for a small business,” said Tio. “Because the insurance cost per employee is so high, Maximum Marketing shares the cost with the employee by paying two-thirds of the premium. We participate in the section 125 pre-tax insurance deduction plan, allowing the employee’s portion of the payment to be deducted pre-tax on a semi-monthly basis.

“Maximum Marketing is enrolled in the Flexible Spending Accounts program, offering employees the ability to put pre-tax dollars into a medical/dental or dependant care account to pay for medical or dental expenses that are not covered by the healthcare insurance. We review our comprehensive plan annually to make sure we have the best possible healthcare program that provides our employees with options for the type of coverage that best suits their needs and promotes preventative medical benefits, such as yearly check-up visits and smoking cessation plans.”

While individual companies are looking at alternative ways to limit the rising costs of healthcare, MEMA and other associations will work as representatives of the entire industry to reach out to legislators and hopefully impact healthcare reform as a whole. McCullough added that the healthcare will be among the issues discussed at the MEMA’s upcoming Legislative Summit in Washington, D.C.

“They [the work group] will help us form our policy statement on healthcare reform, which we will be using at the Legislative Summit,” she said. “Really what I’m hoping the group can do is help us, as a trade association, formulate our messages on healthcare reform and then as the debate heats up go within Congress and especially with the presidential election coming up in 2008, we will be in a position to weigh-in as the supplier community.”