ALBANYNew uncertainties about New York's economic future make it more important than ever that state lawmakers help make affordable health insurance more accessible to sole proprietors, Business Council President Daniel B. Walsh said today.
The Business Council this week has stepped up calls to lawmakers urging them to pass legislation that would let sole proprietors buy health insurance at group rates through chambers of commerce and other business associations.
"For many weeks, there has been growing evidence of an economic slowdown, and the attacks of Sept. 11 will cause additional economic pain," Walsh said. "For New York's smallest businesses, this will inevitably intensify the already heavy burden of high health insurance costs, which in New York are a daunting cost of doing business.
"There has been strong bipartisan support for this legislation all year, and in recent weeks the case for this change has only grown stronger. We urge lawmakers to act on this proposal without delay."
Status of the proposal: The Assembly and Senate have passed separate bills (S.3795/Seward and A.7413/Morelle) designed to include sole proprietors in the definition of small groups eligible for group-rate insurance available through business associations.
"New York's chambers of commerce urge the leaders to work out the differences between the two versions as quickly as possible," said Garry Douglas, president and CEO of the Plattsburgh-North Country Chamber of Commerce and chairman of the Chamber Alliance of New York State (CANYS), an affiliate of The Business Council.
Recent history of health insurance costs: In recent years, small business proprietors have faced sudden and dramatic premium increases of as much as 30 percent or more. Such increases threaten many businesses' ability to offer any health insurance at all, and can even threaten the viability of the business, Walsh said.
Many insurers, under pressure from skyrocketing health costs, have eliminated the access to group-rated insurance coverage that sole proprietors have had for many years through membership in chambers of commerce or other business associations.
The pressure on sole proprietors from health insurance costs appears to be intensifying. Many health insurers have asked the state Insurance Department to approve new health insurance plans just for sole proprietors. These new products generally would increase sole proprietors' insurance costs up to 40 percent above the small-group rate available through chambers or business associations. For sole proprietors, this cost increase would be added to increases as high as 20 to 30 percent that insurers have proposed for their small-group insurance products.
The state Insurance Department is likely to approve or reject the proposed new plans for sole proprietors within a few weeks. It is feared that, if the proposals are rejected, insurers may drop all coverage of sole proprietors, forcing New York's smallest businesses to buy health insurance from the costly "direct pay" market. If that happens, sole proprietors could face premium increases of as much as 80 or 100 percent.
The proposed legislative solution: The goal of the Assembly and Senate bills is to amend the state Insurance Law to include sole proprietors in the definition of small groups eligible for group-rate insurance available through business associations. At present, group-rate insurance is available only to groups of between two and 50 employees.
The bill would also require sole proprietors to be certified by general-purpose chambers or associations as functioning businesses, and thus eligible for group-rate insurance.
The business community's broad support: More than 100 different chambers of commerce and trade groups across the state have supported this initiative. These supporters include The Chamber Alliance of New York State (CANYS) and its member chambers of commerce, the New York Farm Bureau, and the New York State Retail Council.
"Small businesses throughout New York City are fearful about their economic future. Now is not the time for soaring rate increases that will jeopardize their ability to purchase health insurance or could force them to close their doors altogether," said Nancy Ploeger, executive director of the Manhattan Chamber of Commerce.
-30-