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Female bosses less likely to cut health benefits

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SAN FRANCISCO -- Tammy Troilo-Krings faced another big jump in employee health care costs this year at her 48-worker travel agency outside Columbus, Ohio. She rejected one option flat-out: canceling health benefits altogether. "Absolutely not," she says.

Near Dallas, Jerry Kezhaya isn't nearly as adamant. His auto repair shop, with 25 workers, confronted a threatened 36% premium increase this year. Kezhaya often considers dropping coverage. "It's a catastrophic problem," he says.

As more small companies drop medical benefits, there are signs of a gender divide in how owners tackle the problem. Compared with men, women appear more reluctant to trim or cancel benefits, say entrepreneurship experts at the Center for Women's Business Research, Rochester Institute of Technology and Springboard Enterprises.

"It's sort of part of the DNA of why we're running our own show," says Amy Millman, head of Springboard, which helps women find start-up investors.

The divide comes as the number of female employers grew eight times faster than male employers from 1997 to 2002, the Census Bureau said in a report this summer. Women now employ nearly 10 million workers, about 9% of all non-farm private-sector employees. As women place extra emphasis on health benefits while increasing their share of employment, the health care chasm between haves and have-nots could widen further.

Overall, 60% of employers now offer health benefits, down from 69% five years ago, the Kaiser Family Foundation said last month. It attributed the decline to shifts among small businesses, which employ about half of all workers.

Statistics on the gender divide are not tracked, say Kaiser, health consultants and government agencies. The Center for Women's Business Research is seeking funding to study the matter. Executive Director Sharon Hadary believes the results would show women make medical coverage a bigger priority.

Rochester researchers found hints of the divide in a survey of 261 female and male entrepreneurs published three years ago. The survey found that 65% of the women vs. 29% of the men said creating workplaces with health care and "family-friendly" benefits were a top reason for seeking self-employment.

Not just a 'numbers thing'

To be sure, even as they consider reducing benefits, men say they also worry about employees' well-being. "Do I just look at them as employees? No, I don't," Kezhaya says of the workers at his Auto Shop business. "Do I look at anything as just a numbers thing? No."

Women, too, fret over health costs. But they measure them against their personal experience as mothers and homemakers. "They have a simpatico, an empathy," says Marsha Firestone, founder and president of the Women Presidents' Organization, a 900-member trade group. "Whether this is a good thing or not, I think their second concern is the impact on their bottom line."

Women still have extra responsibility for their family's health care, a burden they then bring to work when they own a business, says Terry Neese, a co-founder of Women Impacting Public Policy, an advocacy group for businesswomen.

In San Antonio, Earline Lagueruela, owner of S&C Advertising & Public Relations, says the line is blurred between business and home. "Men can look at things more dispassionately than women," she says. "We treat our employees as almost members of our family."

Lagueruela has resisted cutting benefits for her 10 workers, despite an 85% price increase this year.

Female-owned businesses are over-represented in industries such as travel services, public relations and other sectors employing lots of women, says Robert Barbato, a management professor at Rochester Institute of Technology. For example, about 15% of female-owned companies are retailers vs. 9% for men, Census data show.

Overall, an analysis of 800 companies by the Center for Women's Business Research showed workforces at female-owned firms were 52% female vs. 38% for those owned by men.

At Troilo-Krings' company, Travel Solutions, premiums soared 22% last year from 2003. Faced with another jump this year, she debated solutions with her chief financial officer. He suggested passing higher costs to employees, who already pay 50% of the expense, or canceling the benefit altogether.

But Troilo-Krings, who co-founded the business in 1995, didn't think they'd exhausted all options. A consultant helped renegotiate Travel Solutions' existing insurance contract. That boosted employee co-pays but turned a premium increase into a small reduction.

Troilo-Krings has offered medical coverage since the agency's start. About 80% of its 48 workers are women, and many are single mothers. That weighed on her when the idea of dropping benefits came up. "I don't want people to have to worry about the health care of their children," she says.

Every small-business owner, regardless of gender, worries about rising health costs, she says. "It's a dilemma for any business: what type of health care to provide and to the degree which you can afford to provide it," Troilo-Krings says.

She believes women are extra sensitive to the issue because of personal experience. She has three children, 14, 6 and 3. Fairly or not, she says, women are often the ones who stay home when kids are sick.

Kezhaya started The Auto Shop in the Dallas suburb of Plano in 1981 and added health benefits four years later. The company has grown, with an expected $2million in revenue this year, he says. His workers have an average tenure of 12 years. "I have great employees," he says.

And their health is good, which is why Kezhaya is frustrated by premium increases that his insurer can't justify to his satisfaction. This year's threatened 36% increase came after a 22% jump last year.

To blunt the rise, Kezhaya agreed to much higher per-employee deductibles: $2,500 vs. $1,000. He still hasn't decided how much of that employees will pay.

Tough decisions

In Weirton, W.Va., Paul Lauttamus also is shifting more of the burden to employees at his father's communications hardware, networking and security monitoring company. Health costs for Lauttamus Communications' 62 workers jumped about 27% this year from 2004, on top of increases in each of the previous five years. Employees now pay 40% of premiums, up from 25% last year and zero in 2001.

Lauttamus says female business owners probably value medical benefits more because women are bigger users of health care. For men, he says, "It's not a top priority." That doesn't mean he's hard-hearted. Lauttamus cares about how they're faring if they've visited a doctor. "I want to hear about it," he says.

Still, if health costs keep rising at double-digit rates, the company would consider dumping its plan. "We'd have to look into making that drastic decision," Lauttamus says.

Kezhaya, facing the same dire prospect, says business owners have one thing in common, regardless of gender. "The buck stops here," he says. "Who else is going to make the decision? ... I signed up for it when I said I'm going to open up my company."

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