The price of health care

February 20, 2007
COMMERCIAL, RETAIL, AUTO : HUMAN RESOURCES

Glass companies struggle to keep up with rising costs

Based on your feedback and interest, we are extending our e-glass HR series. Next week: learn about programs companies offer to encourage healthy lifestyles.Read part one about incentive programs and part two about retirement plans.


Health care costs have ballooned during the past decade, increasing more than 30 percent in the last three years alone. Glass companies and their employees are both feeling the effects.

“Besides the cost of gasoline, I don’t know of anything with more runaway cost increases than health care insurance,” says David Byruch, chief financial officer for J.E. Berkowitz LP in Westville N.J. “Every company deals with [the increases] differently. If there was an easy plan, it wouldn’t be at the epidemic level that it’s at.”

Glass company officials such as Lyle Hill, president of MTH Industries in Chicago, say they have tried to swallow costs at the business level for as long as possible, but, the size and frequency of the increases have become too much, so employees now have to share in the burden.

“We absorbed a couple increases, but with this round of increases, absorbing was no longer an option,” Hill says. “We felt we had three options: we could pass them along completely, reduce the coverage or do some combination. We chose the third and blended the options.”

While employees never take rising deductibles and premiums easily, Hill says open communication can help. For the most recent policy increase, MTH gathered all non-union employees at an open house and let them vote on the options.

The open discussion also allows company executives to assess the health care needs of its employees, so the company is not paying for coverage that goes unused, Hill says.

“Everyone is affected differently, Hill says. “In this Chicago location, our staff is a little older, so maternity benefits are no longer an issue. Certain other coverages, like dental, are very important.”

Byruch says J.E. Berkowitz works within its insurance provider to create several policy options for employees; workers can choose from three plans, Byruch says.

“We try to provide choices that best befit the general needs of the population we’re trying to serve,” Byruch says. “Somebody may choose a plan with a high deductible and lower premium, or a high premium with lower deductible.”

The high cost of health care burns even more for companies when they have big claims from employees. Earl Pitman Jr., owner of Dothan Glass Co. in Dothan, Ala., says about 15 years ago an employee had a child who required more than $350,000 in health care costs from the company. Dothan Glass, a company of 140 employees, has since paid upwards of $100,000 per year to cover the child’s health care needs, he says.

“We’re a family-run company, and we get involved in people’s personal lives, so we share in those costs,” Pitman says.

Despite all the money companies put into health care plans, Pitman says some workers still don’t recognize the benefit they receive from the policies.

“There are people like that who don’t see beyond the noose,” Pitman says. “We’ve had people go to the competition because they’ll get a 50 cent raise, even though they will lose their health insurance.”

For those who do, such as his employee who depends heavily on the coverage to care for his child, the health plans truly act as a lifesaver, Pitman says.