April 29, 2015
The Honorable Members of the Vermont Senate
State House
Montpelier, VT 05605
RE: H.489 – OPPOSE the EMPLOYER
ASSESSMENT
Dear Members of the Senate:
National Federation of Independent Business/Vermont (NFIB/VT) has
consistently urged the legislature to be mindful of the financial consequences
being placed on small businesses. We
believe that lawmakers must bring spending in line with the growth of our
economy. Vermont cannot sustain 4-5
percent growth in spending year-after-year when our economy is growing at less
than 3 percent.
H.489 raises $37.5 million, with a myriad of new and/or expanded taxes,
and I would like to specifically draw your attention to the Employer
Assessment.
NFIB/VT has been opposed to this tax since its inception. The EA was first imposed to fund subsidies
for Catamount Health (CHP), which was eventually repealed, it then became a
funding source for the operation of Vermont Health Connect (VHC). Last year,
lawmakers used some of the $18 million raised via the EA to “fill the $3M
budget gap”.
The
Senate Finance Committee proposal maintains the annual EA increases tied to
premium increases and establishes a new three tier system:
- A
63% increase to employers with 50 to 249 employees EA rate would go from
$140.84 to rate of $228.13 per employee. - A
128% increase to employers with more than 250
employees EA rate would go from $140.84 to a rate of $319.38 per employee. - The
proposal doesn’t increase the rate this year for employers with fewer than 50
employees; maintaining the rate of $140.84 per employee.
The EA
should have been repealed years ago; and it should be repealed now. VHC doesn’t work, so small businesses are purchasing
their coverage directly through insurers; which means this is a funding source
without a purpose. The EA has apparently
become a convenient penalty to grab money in order to fund over spending.
I ask you to
recall that this entire health care reform effort, according to Gov. Shumlin,
was imagined to provide access to more affordable coverage for all Vermonters
AND remove the burden of offering health insurance from employers. It was at the encouragement of the Shumlin
Administration, and others, that some small business owners dropped their
coverage and now are in a position of having to pay the Employer Assessment.
Please
oppose the Employer Assessment provisions contained in H.489, the revenue bill.
Sincerely,
Shawn Shouldice
Repeal the Employer
Assessment is Nothing More Than a Penalty
Examples of Governor Shumlin and Others Encouraging
Businesses to Drop Health Insurance Coverage
The health care
reform scheme was be about providing access to affordable coverage for all
Vermonters. It was also pitched as a means
for removing the burden on employers of offering health insurance. In fact, Governor Shumlin and others
encouraged small business owners to drop their coverage.
1.
VTDIGGER Reports on Aug. 12, 2012: “The Shumlin
administration has said it would encourage small employers to drop insurance
coverage of individuals so that they can qualify for subsidies.”
2.
VPR Reports on Sept. 7, 2012: “Shumlin
says the federal law includes subsidies for people who make less than $47,000 a
year and that’s why he’s encouraging small Vermont businesses to drop their
health care coverage so their employees can purchase their insurance through
the exchange.
“The Affordable
Care Act will encourage small employers like me, business people like me to say
we’re going to help you go to the exchange subsidize, raise your wages so you
can go directly to the exchange to buy your insurance,” said Shumlin.
“We are decoupling health care from employment which is incredibly
important to job growth.”
3.
VTDigger Reports on May 14, 2013: Rep. George Till,
D-Jericho, raised the issue during debate on the floor of the House of
Representatives – “It seems like we have it backwards,” he said. “We have been
encouraging employers explicitly or implicitly to drop insurance so that their
employees can bring down federal subsidies.
On one hand we’re telling employers to drop employees,” he added, “but
then we’re turning around and saying we’re going to make you pay for the
exchange.”
