Health Care at a Virtual Company

One of the key benefits of running a virtual company is that we can keep our expenses much lower than a physical company. On top of that, I believe that our employees are much more productive than sit-in-a-cubicle employees. But there is a very large thing working against us at this moment – health care costs.

As the graph below suggests, our health care costs per person has more than quadrupled in the last 10 years. Worse yet, the costs have risen more than 75% in the last two years alone.

As you can see from the graph, this is a constant battle. They raise our costs basically every year. Our health care insurance at the moment is Blue Cross Blue Shield. Because we are a virtual company, our health care choices are more limited since we can only hire a national provider that has decent coverage where all of our employees live. Each and every year when our costs rose again, I naively thought that we should look for a new provider. And each and every year, all of our employees dutifully filled out the massive health care applications and each and every year, all of Blue Cross Blue Shield’s competitors prices were in lock step with BCBS’s price increases. It was like the game was rigged.

Then I came to a very depression conclusion, the game is rigged. There is a very old law called McCarren Ferguson that essentially makes it legal for the American insurance industry to act as a cartel. That’s right, American insurance are legal cartels, and they are the only American industry that is exempt from American anti-trust legislation.

So each and every year in June, we endure another health insurance rate hike. The worst part is that now the company needs to immediately make more money not to help PC Pitstop grow but to pay the health insurance cartel. Let’s be clear, that the benefits that each employee receives is exactly the same, the only difference is the price is higher. I almost feel like Tony Soprano is breathing down my neck.

This year, I decided to have an open conversation with everyone in the company about the evils of American health insurance. I am not sure what I wanted to accomplish but I felt it was best to lay all the cards on the table. Bad Move! Suddenly, everyone is losing time and energy worrying whether their health insurance is going to change for the worse. So of course, the American way is for the company to eat the cost.

I know I am ranting but it is hard running a small business and this makes it one step harder. Because we are a virtual company, we have less health care options, but either way, the game is rigged against us.

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