New York small business owners continually ask themselves, “Should I offer health insurance, or give my employees a cost of living raise?” “Should I hire more employees, or offer health insurance?” Small businesses should not have to choose.
Running a business is a challenge. Rising health insurance costs make it difficult to sustain, let alone grow and thrive in the current economy. The New York Legislature is partly to blame for the problem.
For more than three decades, state legislators have regularly debated and enacted "mandates" or required health coverage for specific treatments, benefits, providers and categories of dependents. The Affordable Care Act (ACA) established “Essential Health Benefits” (EHB) as a new, more uniform requirement for individual and small group health policies sold inside and outside of Health Exchanges, begun January 2014 and now fully in effect.
For New Yorkers, many of these mandates are not new. Prior to the ACA ours was the most heavily mandated states in the nation and a leader in high health insurance costs. The Employer Alliance for Affordable Health Care was created by members of New York’s small business community. In 1997 a half a dozen small business owners and chamber of commerce executives took steps to address the problem by maintaining a narrow focus designed to provide immediate relief from higher costs.
The history of mandates
Mandated benefit efforts started in the 1970s, were accelerated as part of the anti-managed care push back in the 1990s. Many of the original mandated benefits were ones that any reasonable person would expect to be covered by their health insurance. Next, mandated benefits focused on providers such as chiropractors and fertility specialists who lobbied state legislatures to require health entities to pay for their services. The next slew of mandates were in response to tight state budgets, when state programs began requesting mandated reimbursement from health insurers for services they are required to provide, thus moving the cost of these services from public programs to the privately insured population.
Today many of New York’s mandates are put in place to help offset program costs that may, or may not be related to health care: Taxes on private health insurance coverage total an estimated $4.6 billion dollars in 2015. In addition to state taxes, New Yorkers paid roughly $1.8 billion dollars in federal taxes and fees for private health insurance in 2015, bringing the total tax to $6.4 billion dollars. The Affordable Care Act promised to resolve the problem and the federal program did increase access, it did not address the factors that attribute to high health care costs.
New York State lawmakers, including Governor Andrew Cuomo, have played a role in exacerbating costs. The Employer Alliance evolved to reverse that trend. We are the largest, single-issue grassroots coalition in New York State. Our members come together to educate New York State lawmakers on practical, immediate steps that can be taken to help alleviate the burden of high premiums. By supporting common sense solutions such as restraint from new coverage mandates, fees and surcharges, we can give small businesses some necessary relief.
After all, having access to health insurance is useless if it’s something you cannot afford.
The Employer Alliance is a volunteer organization. We do not charge for membership, but rely on donations of money, time and in-kind support to sustain our advocacy work. To learn more email firstname.lastname@example.org or call (518) 462-2296.
Governor Andrew Cuomo has spoken and affordable health insurance is NOT his priority this session.
Tbe Governor has vetoed funding that is needed to create New York’s Health Care Quality Cost Containment Commission, a cost-saving entity created following a statewide effort spearheaded by The Employer Alliance for Affordable Health Care.
The Health Care Quality and Cost Containment Commission, also called the Mandate Review Commission, was established in 2007 to review health insurance mandate proposals BEFORE they are voted upon by Legislators. The purpose was to give lawmakers information about the cost and medical efficacy of mandate proposals, allowing them to make an informed vote. This type of commission is a tool that has proved effective in controlling costs in 26 other states and one that brings a much-needed level of transparency to the mandate review process.
Years have passed and the Commission has not been seated, held up by the Democratic-controlled Assembly’s failure to make the necessary appointments. The Governor, also a Democrat, cited this lack of movement as the reason for his veto, stating:
“In general, seven years is more than enough time to fund and implement services.”
Creation of the Health Care Quality and Cost Containment Commission acknowledged that the state legislature finally recognized the financial burden of that health insurance mandates place on small businesses. The 2003 actuary report completed by NovaRest Consulting proved without a doubt that health insurance mandates cost money, increasing premiums by 12.2 percent per policy holder per year. The cost is much higher today.
The Empire Center public policy institute reports that no less than 91 health insurance mandates are proposed this session. Without a commission there is no way to determine if the mandate is medical sound, or its cost.
Also in the budget, the Legislature extended the HCRA tax on your health insurance premiums through 2020 in order to generate an additional $13.3 billion in state revenue. That is money paid by premiums payers that, for the most part, is NOT used for health care. This blatant disregard for small business needs is unacceptable. Albany needs to know.
Moving forward we will need your help to rectify the situation. Only by working together can we make a difference.