Logo, The Employer Alliance for Affordable Health Care - Health Care Advocacy Group
(518) 462-2296
P.O. Box 1412
Albany, NY 12201

MEMORANDUM IN OPPOSITION

Date: June 19, 2008
Bill:S.8225-A (Volker)/A.11176-A (Schroeder)
An act to amend the insurance law, in relation to excepting from community rating requirements group health insurance policies issued to multiple employer trusts consisting of municipal corporations and public benefit corporations.

The Employer Alliance for Affordable Health Care strongly opposes this legislation that would provide an exception to New York’s community rating requirements to allow municipalities with 50 or fewer employees to join multiple employer or similar trusts such as a voluntary employees’ beneficiary association (VEBA) that are experience rated.

Exempting some small employers — small municipalities — from the state’s community rated pool would have a detrimental impact on the community rated market, raising health insurance costs for those small employers remaining in the pool.

In addition to creating an unlevel playing field between small employers, this proposal will permit and even encourage gaming of the small group community rating pool by allowing small municipalities to shift high cost/bad experience municipalities back into small business pool. This is because in order for the VEBA to maintain its favorable experience rating, municipalities with bad risk would be encouraged to rejoin the small group community rated pool. Permitting the skimming of good risk municipalities into VEBA and out of the small group pool would result in small business cross subsidizing such bad experience municipalities.

Many small businesses in New York are already struggling to afford health insurance coverage. This proposal will make that situation worse. New York lawmakers should be looking for ways to keep health insurance affordable for all classes of employers. For these reasons, the Employer Alliance for Affordable Health Care opposes S.88225-A /A.11176-A and urges a “no” vote on this bill.

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.

Employer Alliance For Affordable Health Care
PO Box 1412
Albany, New York 2201-1412
518-462-2296
www.employeralliance.com