“Cost containment is a critical issue for our state’s employers, particularly the small businesses that are so often the genesis of new jobs,” said Representative Michael A. Costello. “This rate freeze was an important step to helping them control their expenses and promote renewed economic investment.”
“The economic climate in Massachusetts has been improving, but at a snail’s pace, and we must ensure that its fragile recovery isn’t thwarted by imposing new, increased costs on businesses,” said Senator Steven A. Baddour. “This is the wrong time to demand new, punitive costs.”
“For years, business organizations have been requesting a rate freeze on the Unemployment Insurance. For small businesses the savings come at a critical time,” said William K. Piercey, Executive Director of the Amesbury Chamber of Commerce. “The Chamber is grateful for the hard work and leadership of Senator Baddour and Representative Costello.”
Earlier this week, the Division of Insurance promulgated regulations that allow small businesses to obtain lower-cost coverage through group purchasing cooperatives, and increase the availability of less expensive select and tiered network plans. The regulations were the result of health care cost relief provisions included in last year’s economic development bill and supported by Senator Baddour and Representative Costello.
The new regulations allow for the creation of six cooperatives serving up to 85,000 people. After the Division certifies the six cooperatives, insurance carriers will be required to develop products that are designed by the cooperatives, which could be available by late summer.
“Especially during this challenging economic time we enthusiastically support the efforts made by our area’s leadership to help control costs for businesses, large and small in the greater Newburyport area,” said Ann Ormond, President of the Greater Newburyport Chamber of Commerce.”We look forward to working with our delegation on these two important areas of concern to our business community – health insurance regulations and unemployment insurance rate freeze.”
The package of regulations also requires carriers to offer selective or tiered network plans that cost 12 percent less than “full-network” plans. These discounted plans will offer access to quality services while providing a smaller pool of providers or higher co-payments for care received from certain network providers. Other regulations filed earlier this month will create a more robust rate-review process, change open enrollment rules, and create rate restrictions that will smooth out rate shocks on small businesses.
“We know that health care is small businesses’ largest and fastest growing expense,” Costello said. “These regulations provide critical tools to control small business health insurance costs, while providing robust health care options.”
“The rising cost of health care has forced many businesses to reconsider expanding their workforce. Now as the economy appears to heading in the right direction, the timing of creating health insurance purchasing cooperatives comes at a good time,” Piercey said. “Thanks to the Administration, Senator Baddour and Representative Costello, small businesses now have another option for health care coverage.”
Costello was recently named House Chairman of the Joint Committee on Financial Services, which has oversight over legislation affecting the insurance industry, including health care companies. Governor Deval Patrick has invited Representative Costello to attend the Greater Boston Chamber of Commerce Breakfast Thursday morning, where the Governor is expected to discuss further measures to control health care costs.
“We remain committed to making sure that health care in Massachusetts is both accessible and affordable,” Costello said.
Baddour has also proposed new legislation that would overhaul the unemployment insurance program to create a fair, equitable and consistent policy.
“Over the past few years, we have taken a piece meal approach to setting unemployment insurance rates and I believe this is the right time to look at the way we fund the entire program. This session I filed a bill that would help fund the system in a more predictable and responsible way,” said Baddour.
Baddour’s bill, “An Act Relative to Unemployment Insurance Reform” would offer the following solutions:
1. Compute UI rates based on the average payroll paid over the past 3 years instead of solely using the prior year’s payroll, mitigating the wide swings in employment that sometimes occur annually. Today, the system essentially penalizes small businesses that have a sudden surge in payroll because of rapid growth and expansion. This change would also benefit companies that have steady annual growth.
2. Mandate that workers must work a set minimum number of weeks in at least 2 quarters of the year in order to qualify for UI benefits rather than simply using an earnings test of 30x the benefit standard to qualify. By tightening work standards, the state can eliminate rampant UI fraud and abuse by those who employ workers just enough to later lay them off, allow them to collect UI and then rehire when their benefits expire.