Last July, Home Town Restyling, an Iowa home improvement company, held a wellness fair at its office in Hiawatha. Owner and president Wayne Winn says that all 40 employees on the company's health insurance plan — including canvassers, installers, salespeople, and management — moved through a series of seven stations staffed by nurses and received, in essence, a full checkup. That included having blood drawn for blood-work tests as well as blood-pressure and body-fat readings. The event was over and the medical personnel gone in just three hours, but the results showed one 49-year-old employee with high blood pressure, for which she subsequently was treated.

The idea, Winn's insurance agent explained to him, is not so much to reduce the costs of his insurance premiums, as to catch potentially serious medical situations before they fully develop, at which point rates rise. In addition, the wellness fair and consequent recordkeeping establishes a health history for the company's employees, something that is extremely useful in the event that Home Town Restyling needs to switch insurers. The company's office manager and comptroller organized the event, and Winn says that he plans to do it every year from now on.

Unwelcome Options

Home improvement company owners, like small businesses everywhere, face steadily escalating costs when it comes to providing employees with health insurance. Research based on its annual survey of 2,000 small businesses by nonprofit group Kaiser Family Foundation shows premium costs more than doubling in the space of this decade. In 2000, the average annual cost of an employer-offered individual policy was $2,471. In 2009, it is $4,824. Health insurance costs for a family show a similar increase: from $6,438 in 2000 to $13,375 this year.

For many employers, health insurance is the most expensive benefit they offer, equal to, on average, about 12% of payroll, according to the Congressional Budget Office. When sales were on an upswing, and employees more difficult to attract and retain, few home improvement company owners considered the cost unaffordable. But slower sales combined with those rising premium rates have forced many owners to choose some method of slowing or reducing those costs.

This year, for instance, at the suggestion of its insurance broker, Appleby Systems, a window and sunroom company in York, Pa., with 125 employees at five branch locations, went with a high-deductible plan. The company made the plan palatable for employees by reimbursing for expenses over and above its previous deductible. Generally, the higher the deductible, the lower the cost of the premium. Since high-deductible policies — defined as those with deductibles of $1,000 or more — are a fraction of the cost of conventional health insurance, the solution of reimbursing employees for out-of-pocket expenses beyond a certain point is one that worked for Appleby Systems and is working for others.

Another option: Purchase a high-deductible policy and have employees establish health savings accounts to cover pre-deductible health care costs.