June 26, 2006
Legislative session ends with defeat of infamous 'Wal-Mart' bills
Lawmakers also pass Council-supported bill to change workers' comp assessments
New York lawmakers ended the 2006 legislative session without enacting the most onerous of the so-called Wal-Mart bills that would have dramatically inflated employers' costs and eliminated tens of thousands of jobs in New York.
The legislative session was also marked by favorable action on several other issues that are Council priorities, including a key change in the way workers' comp assessments are calculated for self-insured trusts.
Proposed health-insurance mandate and tax on employers: The Business Council had lobbied aggressively against any and all proposals to require any employers to offer health insurance benefits or pay a new punitive tax.
The most draconian of these so-called "WalMart" bills (S.7090-Spano/A.10587-Gottfried) would impose penalties on employers with 100 or more employers, and would require a minimum payment of $3 per hour per employee on benefits.
The Council had argued against addressing a societal problem stemming from high health-insurance costs with policies that would drive those costs dramatically higher for countless employers.
The Council also cited a study by a University of Kentucky economist that found that the worst of the bills would eliminate at least 69,000 jobs in New York State, and possibly as many as 100,000 jobs.
Better health-care policy alternatives include giving individuals and businesses that buy health insurance in New York State and exploring a health-insurance policy innovation in Massachusetts that includes some promising components, the Council has argued.
Workers' comp assessments: Lawmakers also passed a bill (S.5612B-Winner/A.8713-B/Farrell) that would enact a key change to the workers' comp system that has been a top Council priority. Under this legislation, group self-insureds would pay their workers' compensation assessment for special funds through a surcharge based on premium, in accordance with rules set forth by the New York Compensation Insurance Rating Board. The change of payment from an indemnity-loss basis to a premium basis was authorized for commercial carriers by the Legislature in 1999. This legislation would provide parity for group self-insureds.
Assessments are placed on all employers to pay the expenses of the state’s Workers' Compensation Board and to finance special-purpose funds, such as the Second Injury Fund.
Workers' comp reform: Legislators took no action on a Council-supported bill (S.8212-Alese/A.12000/Morelle) that would enact significant cost-cutting reforms to workers' compensation and significantly increase the maximum weekly benefit available to injured workers.
New York State's workers comp costs are the nation's second highest, 86 percent above average on a costs-per-case basis, according to the National Council on Compensation Insurance (NCCI). These costs remain high largely because of high costs of claims in cases for which benefits are unlimited under statute. These claims account for only 11.7 percent of claims in New York, yet they account for 73 percent of the aggregate cost of workers’ comp. New York is one of only nine states that does not limit the duration of awards in these cases.
The bill would limit the duration of these benefits and require the use of objective medical guidelines to evaluate injuries in comp cases.
The bill would also reform the state's notorious Scaffold Law, which holds property-owners and contractors absolutely liable for worksite injuries regardless of their safety records or worker negligence. The bill would permit the consideration of evidence of worker negligence and employer safety in determining liability.
Power for Jobs: Lawmakers extended through 2007 the state's Power for Jobs program, which offers reduced-rate power to employers that pledge to use it to create or retain jobs. The Legislature had voted to extend the program as part of the state budget, but Governor Pataki vetoed that provision because there were future legislative appropriations attached to the extender.
Debt reform: The state Senate passed a constitutional debt-reform proposal (S.8333-Bruno) under which:
- All appropriation-backed debt would be eliminated.
- Total state-related debt outstanding would be capped at 4 percent of personal income.
- Revenue debt would only be allowed for existing capital projects and/or maintenance and improvements on capital projects that have already received voter approval.
- Issuance of debt would be limited to capital works only.
Legislators took no action on a Council-supported bill (S.8176/Libous-A.11516-Morelle) that proposed a constitutional amendment to enact debt reform as state Comptroller Alan Hevesi has proposed. Specifically, this bill would:
- Define state-funded debt to include all debt supported by state resources, which includes most debt held by public authorities.
- Limit outstanding state-funded debt to 5 percent of personal income -- it is now 7 percent -- and limit new borrowing to 95 percent of the previous year until debt as a percentage of personal income is below 5 percent.
- Create an independent debt management board which would conduct an "annual debt affordability study." The study would examine the state's debt level and analyze the state's ability to issue new debt.
- Require voter approval for debt exceeding $1 billion and authorize ballot initiatives to consolidate state-funded debt.
Health-insurance for sole proprietors: In a significant victory for the Council and the state's smallest businesses, lawmakers passed a bill that would allow sole proprietors to buy health insurance from chambers and other associations at a price that is no more than than 115 percent of the group rate the association charges to groups of 50 or fewer employees. Albany first passed such sole-proprietor legislation in 2002, when the maximum allowable charge was 120 percent of the group rate.
Medicaid inspector general: The Legislature has passed a bill (S.8450-Skelos/A.12015-Rules) that would create an Office of Medicaid Inspector General to intensify the state's efforts to combat Medicaid fraud.
Mental-health parity: The Associated Press reported on June 25 that lawmakers had agreed to pass a bill that would mandate "mental-health parity" in employee health benefits. The Council is reviewing this bill to determine its effects on employers, and has not yet taken a formal position on it.
In general, the Council opposes health-insurance mandates because they inflate the cost of health insurance and make it more likely that many individuals and businesses will be unable to afford any health insurance at all.