SMALL BUSINESS PROFILE: ERTEL AND CO.

By Della Pacheco dpacheco@ibj.com

It’s no secret that health care costs are rising at an alarming rate for consumers and businesses.

In a 2002 employer health-benefit survey conducted by The Kaiser Family Foundation, premiums for employer-sponsored health insurance increased on average nearly 13 percent in one year.

Employers are struggling with how to continue offering competitive health insurance benefits, the second-mostrequested employee benefit, while containing costs.

Increasingly companies are turning to agencies such as Ertel and Co., a Fishers-based employee-benefits and insurance consulting firm, for assistance.

Ertel and Co. focuses on helping businesses with fewer than 300 employees find affordable health insurance as well as cost-effective solutions for other employee benefits, such as dental, vision and disability insurance, as well as retirement plans.

Michael Ertel, president of Ertel and Co., said increased paperwork required by insurance carriers and changing reg- ulations have affected the amount of time that employers spend on insurance issues. And mounting federal regulations, such as the Health Insurance Portability and Accountability Act or HIPAA, have sent compliance costs into the billions, according to the U.S. Department of Health and Human Services.

 A 2002 PricewaterhouseCoopers study found that federal regulations often duplicate or conflict with state rules, and more mandates are on the horizon.

“Clients are bombarded with regulations,” Ertel said. “We help them with how to best comply with the regulations.”

One such client is American Industrial Corp., a Greenwood manufacturer of liquid and powder finishing equipment. Mark Shriver, vice president of corporate operations, counts Mike Ertel as part of his company’s benefits team.

 “Mike Ertel provides AIC with guidance on complying with complicated legal requirements, such as [Consolidated Omnibus Budget Reconciliation Act] (COBRA) and HIPAA, and keeps us abreast of employee-benefit trends and cost-containment opportunities during this very challenging business environment,” Shriver said.

 “Ertel and Co. has handled AIC’s health, life and disability benefits for over a decade. They actively participate in our employee-benefit meetings, confidentially respond to benefit questions from our employees, and serve as advocates for AIC and our employees in communications with our individual benefit suppliers.”

Ertel started his business in 1995 after spending five years working for Business Insurance Resources, a provider of employee health insurance benefits for small businesses.

When the company was sold to a sister company in Fort Wayne, Ertel decided it was time to start his own agency. “I worked out an amicable agreement where I was able to purchase my clients from them over a period of time,” he said.

Like many other small-business owners, Ertel had no formal business plan in place when he started his agency. “I knew exactly what I was getting into because it was exactly what I was doing before starting the agency,” he said. “I certainly had goals, expectations and strategies written down, but I’m not sure a banker would recognize it as a business plan.”

Ertel used his own money to start the business.

The problems he encountered early on had less to do with running the business than with his lack of experience in managing employees. “It was second nature working with clients, but the unique challenge was managing employees and putting them into positions to be successful,” Ertel said.

He had one full-time employee for the first 18 months, and currently has a staff of five. Annual revenue has been about $450,000.

While there are many companies that offer health insurance consulting services, Ertel and Co. has tried to rise above the competition by offering value-added services such as “best practice” assistance in areas such as employer Web sites, health-savings-account administration and more.

Bruce Carmichael, president of TomKen Tool & Engineering in Muncie, a client since 1996, said Ertel offers many options for his company’s insurance needs. “We have moved from traditional insurance to self-funding, and now face further changes in our near future,” he said. “Mike is always open-minded about the proper insurance application for our company and tries to offer several alternatives to match our needs.”

Ertel provides a Web site, www.ertelandcompany.com, with the latest information on industry regulations, and helpful tips on controlling costs are highlighted. It also offers quarterly newsletters and seminars on compliance issues related to federal and state regulations and changes in the insurance industry.

“We hope what sets us apart from other companies is that we actually partner with our clients,” Ertel said. “They know they can count on us to provide expertise in a timely manner.”

Each year, whether a company renews its contract or not, Ertel offers company officials detailed information on what’s happening in the marketplace so they can make the best-informed decision, he said.

Ertel and Co. has introduced a new adjunct to its business called MedicalInsuranceNow.com, which offers side-byside comparisons of health insurance plans for consumers. Increasing costs and decreasing employer contribution amounts, in some cases, have fueled interest in learning more about individual coverage.

The site offers one spot to compare plans of dozens of insurers, saving people the trouble of having to go to multiple Web sites for information, Ertel said. Consumers can get real-time quotes online or by phone, and small-business owners can request quotes on insurance plans.

Michael Ertel runs Ertel and Co., a benefits and insurance consulting firm.