Press Release

FOR IMMEDIATE RELEASE

Date: June 18, 2010
Contact: Pamela Reese Finch

Small business to suffer with loss of subsidy

ALBANY – Small businesses that access mental health treatment through their health insurance policies will now collectively shoulder an additional $100 million in higher premium costs as the result of 2010-11 budget resolutions adopted by the State Legislature.

Today’s budget measures eliminated the small business subsidy allocation that was created in 2007 as part of the Legislature’s passage of the mental health mandate, commonly known as “Timothy’s Law.” All health insurance mandates always increase the cost of health insurance costs for small and medium-sized companies that lack the ability to self-insure. A report by the State Department of Insurance found that the 2007 Mental Health Mandate has resulted in an increase of approximately 2%, but also determined that this added increase had been offset for small businesses due to the subsidy.

“Today small businesses lost one of the few protections that existed to help control their health insurance costs,” said Executive Director Pamela Reese Finch. “Time and time again state leaders, who are covered under the taxpayer subsidized Empire Plan, claim to understand the gravity of this problem and yet their action is in direct contradiction to their words. With three million people in New York who are uninsured and others struggling to keep even bare bones coverage, eliminating this subsidy is the worse decision they can make. We need greater access to affordable products, not higher costs.”

Alliance Chair Scott Miller - a small business owner from Amsterdam, agreed: “Several years ago the Legislature, when state leaders implemented this broad legislation – they acknowledged the hardship that added cost places on New York’s small businesses,” he said. “While we appreciate the past savings of approximately $300 million – but recognize that today’s decision could ultimately result in 200,000 people dropping their coverage all-together.”

New Yorkers now pay 14.2% to offset the cost of state coverage mandates. An autism bill recently passed through the Senate, will further increase this price tag by another 2%.

The Employer Alliance for Affordable Health Care is a coalition of more than 3,400 employers and individuals from across New York, representing more than 200,000 working New Yorkers, committed to preserving quality affordable health care.