Dealing with the high cost of compliance
June 21, 2011 |
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Greetings!
My bill providing health insurance cost relief to small businesses was heard this morning by the Joint Committee on Public Health. Below is an article about that hearing. Randy
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REP: OBAMACARE STANDARDS COULD SPUR SMALL BIZ TO LEAVE MASS
By Kyle Cheney
STATE HOUSE NEWS SERVICE
STATE HOUSE, BOSTON, JUNE 21, 2011.....Border communities will see an exodus of small businesses within the next three years if Massachusetts fails to relax the requirement that companies with 11 or more employees subsidize health plans for their workers, a state representative said Tuesday.
In January 2014, new federal health care rules will require businesses with 50 or more employees to subsidize employee health care, Rep. Randy Hunt (R-Sandwich) testified at a hearing of the Legislature's Public Health Committee. When that provision takes effect, he said, Massachusetts's more stringent requirement would incentivize many of the Bay State's 18,000 businesses with between 10 and 50 employees to move across the border and avoid a $295-per-employee so-called free rider penalty.
Hunt urged his colleagues to support a bill (H 2351) that would lift the threshold at which businesses are penalized for failing to subsidize health care plans for their workers, linking it to the federal law, a move he said was not only prudent but inevitable to protect the Massachusetts economy.
"This is more of a small business assistance bill than it is a public health bill," Hunt said. "It would not change the requirements for people to have insurance. What it would do is act as a jobs bill, in a way."
Under Massachusetts's 2006 health care law - which served as a model for the federal law signed by President Obama last year - employers with 11 or more workers must provide insurance coverage to 25 percent of their employees or subsidize 33 percent of the cost of their workers' health insurance in order to avoid penalties. In fiscal 2008, the latest year that fair share contributions were broken down by company size, more than 95 percent of companies between 11 and 50 employees met the minimum requirements.
Hunt, a certified public accountant, said several of his clients have stopped hiring when they reach 10 employees to avoid health care penalties. In one case, he said, a company reduced its workforce from 13 to 10 to avoid the subsidy requirement. These companies, he said, can't afford to hire a full-time human resources worker to address paperwork and forms necessary to comply with health insurance mandates.
"The number of businesses in the state percentage-wise who have 10 or fewer employees is a whopping 88 percent of the businesses that hire people here," he said, adding that Massachusetts companies with between one and 50 workers employ nearly 1 million people.
Acknowledging that his plan would result in many employees losing an employer subsidy, Hunt also plugged a second bill (H 2087) that he said would suspend until January 2014 the minimum coverage policies that Massachusetts residents must purchase in order to avoid individual penalties.
"We have the highest cost for health insurance in the country. We want a fix that's going to make things better, and I am all in on that," he said.
Rep. Jeffrey Sanchez (D-Jamaica Plain), co-chair of the committee, asked whether Hunt's drive to ease requirements on Massachusetts businesses was based on policy or ideological concerns.
"Our standard is high because we wanted to make sure everyone is insured," Sanchez said.
But Hunt rejected the suggestion that he was making a partisan case.
"I have enough anecdotal evidence, being a CPA with my small business clients, to know this is not an ideological argument. It's a practical one," he replied, adding. "You'll find out, I'm not much of an ideologue. I'm not good at it."
Sen. Susan Fargo (D-Lincoln) asked Hunt whether legislation passed last year enabling small businesses to band together to purchase less-costly health insurance - slated to begin July 1 - had made a dent in their ability to afford insurance. Hunt said he supported the program but noted that it limited membership to no more than 185,000 employees, essentially making it a "pilot study" but not a statewide solution.
"There are many, many, many small businesses that aren't going to be able to take advantage of this program," Hunt said.
Fargo worried that the small business program, as well as other public health requirements, wouldn't be implemented because of a lack of manpower and resources within the Patrick administration.
"We can be busy making laws but if we can't effectuate them, they're null and void," she said.
Rep. Linda Forry (D-Dorchester) argued on behalf of a separate bill (H 2896) that would allow companies with more than 11 employees to exclude from their calculations any employees who receive health care coverage through a spouse or family members. The move, she said, would avoid fining small businesses for failing to cover employees who already have insurance coverage.
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06/21/2011
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