The Business Council of New York State opposes S.4526/A.6519, which creates a new exception from the community rating law for the Freelancers Union, allowing only that organization the opportunity to offer experience rated insurance products. In light of the 2014 roll-out of New York's Health Benefit Exchanges and for the health of the entire community rated market as a whole, it is unwise and unfair to legislate an advantage to one health plan while disadvantaging both individuals and small employers who are not members of the preferred group.
Community rating serves an important role in ensuring that health insurance is affordable and accessible to the individual market and small group market by spreading the risk of high cost medical conditions across a large number of individuals and small groups. New York currently allows only large group employers, those with more than fifty employees, to participate in experience rating. "Freelancers," are sole proprietors, who buy their health insurance through the Freelancers Insurance Company established by the Freelancers Union. Neither freelancers individually nor the Freelancers Union can be considered a large employer.
The disparity created by this legislation between "Freelancers" and other sole proprietors and small employers who purchase their insurance through chambers of commerce and other business membership organizations, as well as individuals and small businesses that will soon purchase insurance through New York's Health Benefit Exchange is striking. Under this proposal the Freelancers Union would also be exempt from the various taxes imposed by the federal Affordable Care Act, thereby increasing the burden of those taxes on small businesses and sole proprietors who remain in the small group and individual community rated pool.
The opportunity granted by this legislation to the Freelancers Union comes directly at the expense of individual New Yorkers and New York employers participating in the community rated pool. This burden-shift would result in a serious imbalance that unfairly hurts local chambers of commerce, small business organizations, small employers and individuals, all for the benefit of one group, the Freelancers Union. Should the legislature see this legislation to be good public policy, then it would be only fair to extend the same right to all other associations, chambers of commerce and small business organizations throughout the state.
For these reasons, The Business Council respectfully opposes S.4526/A.6519.