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
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