MEMORANDUM IN OPPOSITION

Date:  April 28, 2006

Bill:     S.7090 (Spano)/A.10583 (Gottfried) - An act to amend the public health law in relation to establishing a fair share for health care assessment on large employers...

This legislation would mandate that large employers (with more than 100 employees excluding manufacturers and agriculture businesses) to provide health insurance to their employees or pay a fee ($3 per hour per employee) into a fund for the working uninsured.  The Employer Alliance for Affordable Health Care is a coalition of nearly 2,500 small and medium size employers dedicated to keeping health insurance affordable by reducing government mandates.  While the focus of the Alliance has been on traditional provider and service insurance mandates that disproportionately impact small employers, clearly this large employer mandate would be an unwelcome precedent and as a result we oppose this legislation.

S.7090/A.10583 Fails To Address The Real Culprit Of New York’s High Uninsured Rate: Affordable Health Insurance

Nearly three out of four of New York’s 2.7 million uninsured are working.  The vast majority of these individuals work in firms that have fewer than 100 employees.  That New York’s uninsureds are predominately working for small employers highlights the core of New York’s insurance problem:  affordability.  Instead of trying to make insurance more affordable for small businesses and the individuals employed in them, this legislation takes aim solely at large companies – those already most likely to already provide some level of coverage.  If the sponsors of this legislation really want to lower New York’s chronically high rate of uninsured, they need to address the many underlying causes for New York’s high health care costs – including the more than 12% that is spent on meeting the numerous mandates already required by law in this state.

S.7090/A.10583 Is Another Step Towards Mandating All Employers Provide Health Insurance

Unlike any other insurance, health insurance is often predominately paid for by someone different than the ultimate user.  This insurance aberration is largely the result of historical forces that made health insurance a fringe benefit designed to help attract and retain personnel.  Today, what was once a relatively inconsequential portion of an individual’s compensation package has become the most fiercely contested area of labor negotiations.  This friction will continue as employers, encumbered by significant health care costs find ways to meet future coverage demands with limited resources.

As perhaps a glimpse into the future, Massachusetts has recently set a very different course by applying a mandate on individuals to have insurance and then facilitating a competitive market place to where individuals can shop for affordable options. To our mind, this approach is more appropriate than requiring a stand-alone large employer mandate to “play or pay.”  We also note that while this legislation takes aim at large employers today, if passed small employers – trying to compete in our global economy will soon be asked to follow.  As difficult as this legislation is for large – well-capitalized company’s to comply with – it will be considerably more difficult for small businesses already struggling to survive.  This is not an idle concern as there are already proposals in introduction that would require such a mandate on small employers.

For all these reasons and many more, the Employer Alliance for Affordable Health Care opposes this legislation. 

Employer Alliance For Affordable Health Care

PO Box 1412

Albany, New York 12201-1412

(518) 462-2296

employeralliance@yahoo.com

www.employeralliance.com

Scott Miller, Chairman

4/2006