THE OVERVIEW
Leatherwood Electronics & Manufacturing, Inc., a manufacturer located in Charleston, SC, has been in business 17 years and currently has 45 employees. The company performs precision metal fabrication, CNC machining, and electro-mechanical assembly for many different vertical markets. Mike Leatherwood, company founder and president, serves customers in a range of industries, including medical device manufacturers, industrial/commercial equipment manufacturers, and the U.S. military. The company's mission is to serve as a one-stop facility for signature quality products and provide services beyond customers' expectations.

Leatherwood currently serves as chairman of the Lowcountry Manufacturers Council (LMC), an independent membership organization formed to focus on the unique issues and common goals of the manufacturing sector of the Lowcountry of South Carolina.

THE CHALLENGE
Faced with year after year of rising health insurance costs, Leatherwood needed to find a way to maintain health benefits for the company's employees while holding down costs. He had been experiencing a 10%-15% premium increase each year, which seemed to be in keeping with the plight of most small manufacturers in South Carolina. Leatherwood was determined to maintain the level of quality in his employee benefits program, and even hoped to increase the range of benefits. But to do so, he needed to find a new method of providing health insurance coverage for Leatherwood Electronic's employees.

THE SOLUTION
Since his company is a member of LMC, Leatherwood Electronics was eligible to participate in an insurance program begun for the state's small manufacturers. The program, a joint effort between the LMC and the South Carolina Manufacturing Extension Partnership (SCMEP), was started in 1999 for manufacturing companies that fall in SIC Codes 2000 - 3999.

The program enables small manufacturers to provide affordable healthcare coverage for their employees. It is unique because each company is quoted on an individual basis, affected by individual performance and size, in addition to the performance of the overall LMC pool of insured employees.

THE IMPACT
For the first two years of Leatherwood Electronics' participation in the program, the company has saved 15% in insurance premiums and has been able to maintain its current health insurance plan with the same level of employee coverage.

With the continual addition of LMC member companies to the program, the group has gained more negotiating power. Leatherwood Electronics expects to be able to increase its level of insurance benefits over the next few years while maintaining the same cost structure.