10/05/2005
CONTACT: Mike Hickey, (651) 293-1283 or Michael Diegel, (202) 554-9000
ST. PAUL, Minn. -- While an historic budget battle dragged on that included an eight-day partial government shutdown and a 51-day special session, small business achieved several victories during the recently adjourned 2005 session, especially in the health-care area.
"These critical victories got very little attention in the press since the focus was on the political wrangling and the budget battle," said Mike Hickey, state director for the National Federation of Independent Business/Minnesota.
The following victories were achieved in the 2005 session:
Small Employer Flexible Benefit Plans: The most dramatic rewrite of health insurance law since the 1992 MinnesotaCare law was enacted, these flexible benefit plans will be beneficial to many small businesses. They will allow small businesses to tailor health insurance policies to the needs of their employees and could save some as much as 20 percent. NFIB/Minnesota co-led the coalition in support of these new plans. The legislation was authored by Sen. Linda Scheid (Brooklyn Park) and Rep. Tim Wilkin (Eagan).
Health Savings Accounts, Tax Conformity: More good news happened on the health insurance front when the state conformed to the federal law and applied tax deductibility for health savings accounts retroactively to Jan. 1, 2004. The bill was authored by Reps. Wilkin (Eagan) and Knoblach (St. Cloud) in the House and by Sens. LeClair (Woodbury) and Reiter (Shoreview) in the Senate. NFIB/Minnesota supported this effort.
Retroactive Restrictions on Life Estates Repealed: In a victory for family-held businesses and farms, the states attempt to retroactively restrict life estates was repealed in the 2005 session. Prior to the legislation passing, the state lost a court case on this very controversial action. The restrictions would affect individuals who have set up life estates and then applied for and accepted state financed medical assistance for long-term care. Due to the law change, any individual who established a life estate prior to Aug. 1, 2003, is safe from state recovery actions and liens in the event they need medical assistance. This legislation was authored by Rep. Morrie Lanning (Moorhead) and Sen. Sheila Kiscaden (Rochester) NFIB/Minnesota was the only business group that pressed to repeal this unfair measure.
Long-Term Care Partnership: On a similar issue, those who purchase long-term care insurance will have their estates protected under a new state program. Their estate would be protected by an amount equal to the dollar value of their long-term care insurance policy in the event they exhaust their insurance and require medical assistance. If the individual purchased $100,000 or $200,000 of long-term care insurance, their estate will be protected by that much from government recovery efforts and liens. Those who purchase the "total asset protection plan" (36 months of coverage) would have their estates totally protected. Rep. Jim Abeler (Anoka) and Sen. Linda Berglin (Minneapolis) authored this legislation.This new law will require a federal waiver to implement. NFIB/Minnesota supported this measure.
Corporate Income Tax, Single Sales Factor: Another victory was achieved for small businesses that are organized as C-Corporations. Legislation passed that will change the formula for taxation for those businesses to a single sales factor. This change will be most beneficial to homegrown companies that have all or most of their payroll and property in Minnesota. The change starts in 2007 and will be phased in over a seven-year period. NFIB/Minnesota supported this measure.
