Arecent survey revealed disturbing Some state regulations do not have enough CC: How does Costco select the insur-
news about the number of small- flexibility to allow Costco to offer a program ance carriers it uses?
business employees without health that provides enough value for our members. DF: Costco looks for carriers that are well
insurance coverage. The Employee Benefit
Research Institute reported that in businesses
with 10 to 24 employees, slightly more than
half have insurance. In businesses with fewer
than 10 employees, only 42 percent of the
employees are insured.
While being uninsured is problematic,
having and providing health insurance is also
becoming increasingly difficult: Health
insurance premiums rose five times faster
than workers’ salaries this year.
Recognizing the importance of affordable health insurance, Costco offers health
insurance to Executive Members who own
businesses with up to 50 employees. The
program is available in four states—
California, Nevada, Oregon and Washington.
For more information about this program,
visit costco.com, click on “Services” and
then click on “Health Insurance.”
Costco member Linda Kebely of
Bellevue, Washington, who has been running
a preschool for 20 years, was on the verge of
canceling insurance for her employees
because costs were rising too high. After
researching her options, she decided to try
Costco. “We switched to Costco last summer,” says Kebely. “And the amount we
saved was huge.”
Kebely adds that switching carriers was
easy, and whenever she has had to call with
questions about her plan, she always reaches
a real person.
The Connection sat down with Dellanie
Fragnoli, Costco assistant vice president of
insurance services, to learn more about its
small-business health insurance program.
CC: Why is the small-business health
insurance program only available in four
DF: Because of state-specific regulations
regarding small-business health insurance
and the fragmented nature of the medical and
health-insurance industries, Costco develops
these programs on a state-by-state basis.
8 Inside Costco • NOVEMBER 2004