Health Insurance for Salons
The September 19th USA Today editorial pages are filled with opinions on how to best begin to fix what polls show that most Americans agree is “broken” – America’s health care system.
With the wealthiest country in the world now ranking 37th of our 191 countries rated on “health care performance,” Americans seem more open to change then ever - with some of those sentiments now spilling onto our SalonLife blog.
Generally speaking, health care benefits are not a part of our national salon culture. And even in the minority of salons that actually offer group health insurance as an option, few appear to pay the majority of premium costs for employees - in spite of industry wages remaining generally low (especially for new entries into the workforce). Add to this the growing number of booth renters as well as a commissioned work force that changes employers frequently (and likely do not qualify for group plans on their own) and it becomes clear that our industry likely ranks high on the list of America’s “under insured populations.”
One possible solution - the decision by Minneapolis based Juut Salons to include a service charge to clients to directly help pay for employee insurance costs. It’s a unique approach that, although we believe ignores the bigger question of employer responsibility to employees, it’s a start.
Importantly, we hope that the industry will begin to engage in a dialogue on this issue. As professionals we spend virtually all of our time caring for clients - but less and less it seems caring for our own. Juut Salon CEO David Wagner raises an important question - just who is responsible for the well being of employees? Is it the employer, employee, customers, our government or a mix of all?
We would argue that Starbucks, David Wagner’s inspiration, gets it close to right - not by creating a client service charge to offset some costs, but simply by building health care costs into the price of every cup of coffee and offering quality benefits to both full and part time workers.
Inspired by a childhood made difficult by a fathers lack on insurance and its devastating impact on an entire working class family when tragedy strikes, Starbucks today spends more on employee healthcare benefits then it does on coffee beans - and yet has no lack of customers for what is surely one of the most expensive cups of coffees brewed anywhere.
If Starbucks can convince consumers to pony up top dollar for a cup of coffee, perhaps the industry can do itself a big favor by building the costs of healthcare into service prices - and simply (a) letting clients know that that the increase in prices is related to the increasing costs of healthcare and (2) exempting a portion of service prices paid by clients from commissions so that benefits can be realized by staff.
As is made clear in the USA Today editorials, there is no shortage of opinions on the question of insurance. What is lacking is an imaginative, entrepreneurial approach that inspires small businesses to action. For this, we congratulate Juut Salons - and hope that others are inspired to do even more.
Have an opinion on health insurance in the salon industry. Add your comments, click here and then click on the comments link below this post. Also, visit NCA’s website to take our insurance poll - just click here and scroll down the page.
October 11th, 2007 at 11:03 am
Solarus Salon & Spa in Northern Virginia contributes $400 per month per employee to flexible benefits package which includes Carefirst Blue Cross premium plan and child care reimbursments. They also provide 2 weeks paid vacation for each full time employee. www.solarussalo.com
October 11th, 2007 at 1:29 pm
You would think with as many stylist, salons, schools, that are in the united states that some insurance company would offer us a group health insurance plan.
If we band to gether we have a lot of numbers. Isn’t any insurance copy interested in us as a group?
Thanks for listening
October 11th, 2007 at 2:01 pm
A service charge makes a lot of sense to me. I would gladly forego my tips to have the benefits offered by this salon. Tips are taxable, benefits are normally pre-tax. It’s a win-win! Let’s keep our indepedence and not have the government controlling yet another aspect of our lives and businesses!
October 11th, 2007 at 6:11 pm
We had insurance at our salon (8 employees) for many years. But then breast cancer and a pregnancy drove our premiums out of sight and none of us or the salon could afford to continue. Insurance is the biggest scam in america. They take your money gladly until you get sick - and then they kick you out.
October 11th, 2007 at 6:42 pm
It is appalling that in our country there is no way to afford decent health insurance for self or family members. Yes it is wonderful to know that if you go to the Hospital ER or any emergency situtaion you have to be taken care of, but then it is intimidating to know at what exorbitant costs that will be.
I hope to see this industry come around to find coverages to offer to new and long timeprofessionals.
It is so sad that in many career professions there are also many gaps, lacks of medical insurance. It is time to make it change.
Keep up the good work. Thank you.
October 11th, 2007 at 9:00 pm
The best way to provide health insurance to employees is to use a payroll service like ADP. They have options to belong to their group insurance plan. The costs are still high (write your congressman) but you belong to a national group so costs dont change much.
October 13th, 2007 at 9:05 am
Health Savings Accounts and Health Reimbursement Accounts are really the way to go for the industry. The NCA should be working with companies like CIGNA so that salons can join forces and create a nationwide program spreading the risk rates accross the over 1.6 million professional. Since most salons believe that they own the clients vs. the professionals I believe the should take the lead here. Another fee on the customer when rates have increased for services considerably over the last few years may drive some customers to alternative ways of getting service or eliiminating services all together. Just think of the cost of bi-weekly nail service and every 6 week hair appointments - for me I need another mortgage payment just to take care of my hair and nails and I am part of the industry! The government is not the answer, private Health Savings and Health Reimbursement Accounts are the answer. Mention this to any CIGNA representative. At CFO Rising West, sponsored by CFO Magazine, the CIGNA presentation was brilliant and exactly what major industries can utilize to create insurance programs for their professionals.
October 14th, 2007 at 11:00 pm
I work for a MAJOR player in our industry. I currently work for a brand new corporate cosmetology school. The leader of our corporation, along with a few of the other corporate level big wigs arrived for our grand opening on a private jet. One of them had on a diamond watch I would expect to see on a rapper. This company supports several charities across the country. Yet, we don’t have health insurance. What is wrong with this picture? Our mission statement is “when people first, success will follow.” Exactly which people do they mean besides the ones at the top of the corporate ladder?
October 22nd, 2007 at 9:31 pm
Keep it simple.Slaves and owners, if you’re not an owner you are the slave.That’s why hairdressers build up “their” clientele and run out the door. They just want to be an owner.Ownership and opportunity are not instantaneous in this industry.There is always the possibility that you could lose your assistant position even after you put in your time and endured abuse at the hands of the owners. The carrot of success is contantly dangling from the corporate haircutting world that is luring young hairdressers into hard work and loser insurance programs.By the time these newbies know what they’re doing, it’s time for a new career before they lose their tiny one bedroom from eviction after the boyfriend moved out, because he couldn’t take all the complaining about physical aches and pains from cutting for nine hours a day.The salon manager, of course just tells you everybody has something to complain about so change your attitude.By the time you work youself up the ladder to salon ownership you’ll realize that unless you own the real estate all you own is furniture and a business plan.Clients , hairdressers, opportunity and fame will come and go.You are only as good as your last haircut.We all need to be owners not slaves.However, our industry is a is fair example of what is going on in the world.Look around, you might actually sense that there is an economic collapse coming.It’s time for the owners to collect.Say goodbye to SSI, that 401k, it’s going away.That home you say you own, the bank is who you pay.All these rising medical costs are due to a weakened US$.Did your haircut prices go up 140% in the last six years?Anyway,educate yourself because the owners already know what is up.Happy slaving!
October 22nd, 2007 at 10:25 pm
I think you are misunderstanding what being a salon owner is about. The failure rate is quite high and the profit margins low for most. Small business is a tough world to live in these days - owner or employee. So pitting one against the other is not the solution. Also, painting all with the same brush in unfair to all and does not show the true picture. This is an industry with many options. There is no right or wrong. And the ’slave’ analogy is in poor taste, sorry.
October 23rd, 2007 at 1:52 pm
Pardon me.Modern slave would be more like it.Just a metaphor to illustrate the differences in economics created by the impersonal corporations which are the true managers of this industry.Solution: all workers must participate in ownnership of whatever segment of the industry segment they are in.Corporate ownersip must be expanded to give workers equity in their labor as a long term benefit to the commitment made to the “company”. Anyway, I welcome your freedom of speech on this one.
October 25th, 2007 at 10:03 pm
I’m a bit confused. The average salon in America is very small - 3 or 4 stylists and i bet few even bother to incorporate. In our area there are more independent contracters then employees these days. I’m for the little guy but maybe we could learn something from the corporations on how to run better businesses. Seems that maybe what’s wrong with salons and stylists is that we dont think like business people enough. I do agree that if there is one group that fits your description it would be chain salons.
October 25th, 2007 at 10:50 pm
It is the constant supply of workers being milled out by beauty schools that keeps the prices of services down.There is always the hungry hairdresser willing to compete on price points for a fast buck rather than build a business based on ownership and cooperative long term financial and business relationships.The only way to strengthen our industry is to provide a slice of the pie for everyone. This concept is very foriegn to most people. In fact, who would even think to look for such benefits.This type of the salon is able to bless the community by demonstrating that such ventures are possible and through funneling of funds for the benefit of local nonprofits.Financial stability through ownership of real estate and business deveopement that flourishes because of mutual benefits for all.This same type of business model can be constructed for product companies as well.Hairdressers and salon owners could be issued stock on a percentage of sales.Every thing is possible.Take care.
October 27th, 2007 at 9:26 am
I am so impressed with Jonathon and Craig’s interaction here. You are discussing the evolution of the beauty professional and profession in a similar way that the real estate agent/broker relationship changed over time. Once the beauty professional understands their worth, the salon owners will suffer from not moving forward with their concept of a salon. The hourly worker and the salon owns the client concept will disappear and some salon owners will fail. Those that take Jonathon’s approach of partnership with the professional and the owner to promote growth and provide great quality service will be successful in the future. Take the Starbuck’s model as an unusual example to apply here but ownership works. When the professionals own their client and all are in it to be successful, salon and professional both benefit. Try it, there are good examples out there. As a CPA and Business Strategy Consultant I created a marketing set of tools called Cosmo Success Kit to get in the hands of these professionals to promote their business and the salon. That’s the key.
October 27th, 2007 at 10:53 pm
Survival of the fittest.Being fit for business in mind, body and spirit will lead us into the future.We cannot depend on others to provide an inflation proof retirement plan.Unify!
December 6th, 2007 at 4:37 pm
I strongly belive in providing insurance health benefits to my emplyees .Beacouse I do I dont have any turnover. My staff is dedicated to their profesion and they love what they do. I dont understand why so many salons dont provide this important benefit . U.S is the wealtiest country in the world yet 40 milion Americans dont have insurance. Shame on eployers.shame on the emplyoees to accept to work in a place without proper benefits.
Brenda