One of the biggest issues impacting the business climate for the franchise industry and franchisees is the cost and accessibility of health insurance. Studies show that since 1999, employment-based health-insurance premiums have increased 120 percent, compared to cumulative inflation of 44 percent and cumulative wage growth of 29 percent during the same period.
Though they may be firmly committed to helping employees and their families meet their health care needs, franchisees are struggling with rising health care costs that make health care coverage options for themselves and their employees either unaffordable or inadequate.
President Obama pledged to enact comprehensive health care reform this year, and work is expected to get in full swing this summer. I’ll leave it to the political experts to outline the odds of a bill being completed this year or not, but there is little doubt that the stars are aligned politically for significant advancement towards some sort of reform this Congress.
The president has said he will implement an open, inclusive, and transparent process where all ideas are encouraged and all parties work together to find a solution to the health care crisis. His stated goals are to achieve reform that: reduces long-term growth of health care costs for businesses and government; protects families from bankruptcy or debt because of health care costs; guarantees choice of doctors and health plans; invests in prevention and wellness; improves patient safety and quality of care; assures affordable, quality health coverage for all Americans; maintains coverage when you change or lose your job; and ends barriers to coverage for people with pre-existing medical conditions.
These are noble goals and ones that we all agree are important. We are hopeful that President Obama will keep his word and include all parties in the debate, including the franchise industry. As the trade association representing the franchise industry, the International Franchise Association has been working hard to ensure our voices are heard. Working with other business groups, we are promoting legislative efforts to increase the access and affordability of health insurance for franchised businesses and their employees. Specifically, the IFA is working on efforts to:
- Employ market-based reforms to expand competition, increase choice and reduce cost in all markets for the purchase of private health insurance
- Provide tax incentives to assist with the purchase of health insurance
- Increase the health-care options and products available to employers and employees
- Lead to increased transparency for consumers
Targeted tax credits or tax rebates that offset the cost of offering or maintaining health benefits can provide great relief to franchisees and their employees. Such proposals include the creation of a health care tax credit for low- and moderate-income workers; allowing the self-employed to fully deduct their health premium costs, just as other employers currently can; and allowing those who purchase health insurance outside of the employer-employee scenario to receive the same tax treatment as those who purchase it with pre-tax dollars through an employer-offered plan.
The IFA is strongly advocating for legislation that would allow small employers such as franchisees to pool together to offer health insurance to their employees through either the employer’s membership in an association or association-like group (such as a franchise system) or at a state level. Providing a framework for small businesses to join together to buy insurance would enable franchisees to compete on a more level playing field with other businesses by spreading risk among a much larger group, strengthening negotiating power with plans and providers, and reducing administrative costs.
Incremental, market-based reforms that affirm the importance of consumer choice and control by facilitating competition are a realistic method to fix the most obvious problems within our present health care system.
To ensure that Congress hears these views, franchisees need to make their voices heard as Congress begins work on health care reform. For information and tools to contact your local Congressperson, click on the Take Action button on the IFA website.
Dina Dwyer-Owens is chairwoman of the International Franchise Association and chairwoman and CEO of The Dwyer Group.