Lawmakers Considering Multiple Ways to Increase Business Healthcare Costs

Date: July 17, 2017

The healthcare hits on Massachusetts small business owners have been relentless.

First, the Legislature passed a budget that includes increased fees on businesses in order to help offset the state’s rising healthcare costs, but in doing so, lawmakers nixed Gov. Charlie Baker’s proposals to implement cost controls, which had included moving thousands of people from MassHealth to private health plans with eligibility changes.

The fee is an assessment that most businesses already pay—the employer medical assistance contribution (EMAC)—and it will rise from $51 per employee to $77 per employee. For employers who have employees receiving public health benefits, their fee could be as much as $750 per worker. These fees are scheduled to phase out after two years, and in the meantime, state unemployment insurance premiums are to be lowered in exchange.

It’s unclear whether Baker will accept the budget as is and sign it or return it to legislators with edits. Small business owners, however, are opposed to the proposal currently on the table.

 

Christopher Carlozzi, NFIB/MA’s state director, told the Boston Globe, “We’re very disappointed. This was sold to the business community as a temporary assessment that would directly go to relieving and reining in the cost of MassHealth. Without those reforms within this package, we feel the underlying cost is not going to be addressed.”

NFIB/MA also signed onto a letter with several other employer groups, stating their opposition to the new health assessment without significant reforms to tamp down rising healthcare costs. They also called for approval of the reform proposals in their entirety by the end of July.

Additionally, lawmakers have been considering a paid leave proposal that could leave small businesses short-handed for up to 26 weeks—a full half of the year. In his testimony in opposition to House Bills 2172 and 3134 and Senate Bill 1048 before the Joint Committees on Labor and Workforce Development, Carlozzi noted that this proposal would add to the growing list of “Massachusetts-only” expenses, putting the state at a competitive disadvantage, while also stripping small businesses and their employees of needed flexibility.

Massachusetts is already a high-cost state for employers with energy costs, development costs, taxes, unemployment insurance costs, health insurance premiums, mandated sick leave benefits, employee salary and benefit costs at or near the highest in the nation and now the potential for a new health care tax assessment,” he wrote. “These costs and mandates, although not an exhaustive list, are reflected in the small business sector’s economic struggles over the past several years – a sector that has historically served as the state’s job incubator. Small business owners are not a bottomless pit. Now is not the time to impose a new mandate on employers for paid family leave for workers—a mandate that will make the state less economically competitive.”

 

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