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.
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