'Another Assessment Unfairly Targeting Small Businesses' by Jon B. Hurst

With the recent passage of the FY10 state budget, small employers once again find themselves unfairly and inequitably charged with carrying additional assessments in the costs of their health insurance to the tune of an additional $52 million.

This new assessment comes to us by way of the state’s Universal Vaccine Program (4580-1000) which, new in FY10, will now be funded by a $52 million tax on "health insurance carriers, as defined by Chapter 176O.”

Now, the universal immunization program, which provides for the purchase of vaccines for all children in Massachusetts, certainly is a worthwhile and needed program – a program that serves the Commonwealth as a whole and should be supported by the Commonwealth as a whole and thus funded out of the General Fund or, at a minimum, be funded by all health care payers.

However, the language in the budget, referenced above, changes the funding mechanism to assess only those carriers as defined by Chapter 176O to pay for this program. This language ensures that the assessment falls squarely on small-and medium-sized businesses, which purchase health insurance coverage through health insurance carriers defined by Chapter 176O. Left out are the large companies and many Taft-Hartley union accounts, which typically self-insure.

Such plans are governed by ERISA and would not be subject to the assessment. Because self insured plans under ERISA are exempt from assessments on health insurance carriers, funding for the vaccine program would fall only on those entities that obtain coverage through a licensed carrier. So, left in and hit by the assessment? Just the small and medium sized employers who are unable to self insure.

Readers of this blog are familiar with my arguments on behalf of a level playing field for small businesses versus big business and big government in the ability to group buy and negotiate for the purchase of health insurance. This is just another gross example of the small employer being forced to subsidize the costs of others. It simply is not right.

And remember that this assessment goes onto the backs of a small employer who now pays over $23,000 for a family plan, when the same plan through the GIC costs just over $13,000. The small employer in Massachusetts just keeps asking himself - when will it end?

Before the assessment is imposed, we need to revisit this issue soon and amend the language to at a minimum allow for the assessment, which funds a program that benefits all Massachusetts children, to be equitably distributed across all payers, by utilizing the Health Safety Net Trust Fund.

Otherwise, small Massachusetts employers will be getting a $52 million dollar bill soon that they simply cannot afford to pay.

Jon B. Hurst, President
Retailers Association of Massachusetts