The Business Council is strongly opposed to a tax on HMO premiums, which is being considered as part of budget negotiations. This tax would drive the cost of employer-sponsored health coverage higher. Employers – including small businesses in particular which have found HMOs to be an attractive and more affordable coverage option - would be forced to shift more of the cost of coverage to their workers, reduce benefits or drop coverage altogether. This tax and all the other proposed taxes on health coverage run completely counter to the state's efforts to make affordable, comprehensive coverage available to more New Yorkers.
Business Council members have repeatedly identified the cost of employee health coverage as their most significant cost-of-doing-business issue. With a $348 million increase in taxes on health insurance already approved by lawmakers as part of the 2008-09 Deficit Reduction Plan and an additional $500 million in health care and health insurance taxes that are proposed as part of the 2009-10 Executive Budget, these taxes would be reflected in higher premiums and add hundreds of dollars to the cost of providing private health insurance yet would provide no additional covered benefits or have any effect on addressing the rising cost of health care. Employers and their workers are already struggling to afford health coverage, and many will simply not be able to absorb the increased costs caused by these taxes.
By pushing premiums higher, these taxes will force more business owners – particularly small business owners – to reduce or eliminate coverage for their workers, driving up the ranks of the state's uninsured, or shift more of the cost to their employees.
For these reasons, The Business Council strongly urges you to reject the HMO premium tax and all proposed new and increased taxes on health coverage.