Government Affairs Albany UpdateFebruary 27, 2004
- Senate Majority to Introduce Incentive-based New Health Insurance Bill
- Check Your Utility Invoice; Erroneous Taxation Possible
- Assembly Moves Union-Backed Workers' Comp Benefit Bill
- Minimum Wage
The state Senate majority has proposed creating a health insurance tax credit that would help many businesses with 50 or fewer employees provide health insurance for their employees. Senate Majority Leader Joseph Bruno and Senator James L. Seward (R-Oneonta), chair of the Senate Insurance Committee, unveiled the plan at a Feb. 24 press conference.
The plan would create a 43 percent tax credit that, when combined with the existing health insurance tax deduction, would result in an effective tax credit of 50 percent for health insurance costs. The new credit would be available only to businesses with 50 or fewer employees and with earned net income of $290,000 or less.
The credit would be phased in over ten years and, when fully implemented, would result in an investment of almost $1.6 billion to provide health insurance coverage for hundreds of thousands of uninsured New Yorkers, the Senate said in a release.
Business Council President called the Senate plan "a significant new idea in the ongoing effort to make employment-based health insurance more affordable." He added: "A policy that helps more employers offer insurance is certainly preferable to one that would punish employers that cannot offer insurance."
The Senate plan would also:
- Authorize insurers and HMOs to offer "Freedom Policies," which would have higher deductibles and which would be coupled with new health savings accounts (HSAs). HSAs are accounts to which individuals can contribute pre-tax income to cover health-care expenses. The Senate said these policies would cost about 40 percent less than existing policies, but would be subject to all state health insurance mandates.
- Expand participation in the Healthy New York program by increasing the program's eligibility threshold from 208 percent of the federal poverty level to 250 percent of that level, and by permitting individuals above that level to buy into the program at the full unsubsidized premium. Healthy New York is a state program that allows small businesses that offer no health insurance to offer more affordable insurance, with costs shared by the employer and its employees.
In 2003, the Enlarged City School District of Troy created a 2% city school district sales tax on utility services within its boundaries. Utilities providing service within the Troy school district collect the city school district sales tax (among other taxes) and remit the collections to the Department of Taxation & Finance – which, in turn, distributes the various tax collections to the appropriate taxing authority. Apparently, too heavy reliance was placed on postal zip codes in billing the school district's new tax – as utility customers living outside the Troy school district, but, sharing the same zip code have incorrectly been billed for the new tax.
The Department of Taxation & Finance urges businesses and residents who think that they have been erroneously taxed to contact it at 1-800-225-5828. Alternatively, customers can contact their gas, electric, and telecommunication utility providers that administer the tax to report any error for correction.
On Tuesday, February 24, the Assembly Labor Committee voted to move a benefit increase bill (S.6135-Velella / A.9736-John) that would substantially increase workers' compensation benefits. The bill contains no cost saving reforms. See our memo in opposition.
All 17 Democratic members of the committee voted to move the bill to the Assembly Codes Committee, while all six Republican committee members present voted against moving the bill.
The bill would raise the level of workers' comp benefits to $625, two-thirds of the state average weekly wage, by December 2006. The legislation would then annually index benefits to the statewide average weekly wage thereafter. The Business Council's initial estimate is that the increase in benefits alone could raise employers' rates by 25 percent or more.
The bill would also includes provisions which would: allow unions to select a workers' compensation carrier for an employer; eliminate the exclusive remedy rule; create a medical trust fund for employers who do not provide health insurance that compensation bills would be paid out of; permit high-wage earners to purchase additional benefits above the state rate. If the benefits are never used, the money is returned to the worker upon retirement; allow the Workers' Compensation Board to charge an employer for a claimants attorney fees if the employer has unsuccessfully argued against the claim.
The Business Council has launched a new Web-based electronic-advocacy campaign to urge lawmakers to reject the costly union-backed bill and support cost-cutting workers' compensation reform.
On Tuesday, February 24, 2004, the Assembly Labor Committee reported A.9710 (John) to the Assembly Codes Committee. Assembly Codes is scheduled for an off-the-floor meeting on Monday, March 1st so it appears that it will move right along onto the calendar. A quick vote could then occur.
This bill raises the minimum wage in three steps to $7.10 by 1/1/06, raises the tip employee minimum wage and authorizes unions to file complaints with the labor commissioner on behalf of non-union employees.
Please see our memo in opposition.