PRESIDING CHAIRMEN: Senator Prague Representative Ryan

COMMITTEE MEMBERS PRESENT:

SENATORS: DeFronzo, Guglielmo

REPRESENTATIVES: Belden, Esposito, Mantilla, Reinoso, Zalaski, Hetherington, Cafero, Hewett, Olson

LESLIE GABEL-BRETT: --We further believe, and have offered testimony, that workers with incomes above 185% of poverty, who are employed in small businesses, should be able to access affordable health insurance through the MEHIP program.

Workers for large or medium-sized employers, such as those identified in this Legislation, should be offered health insurance they can afford, and their employers should do their share to make it affordable.

Most large employers have already come to the conclusion that providing affordable health insurance coverage is good for their workers and for their businesses.

As noted, about 65% of all health insurance in this state is already provided through employers. But we are facing a crisis about how to close the last gap, to provide affordable health insurance to the last 10% who cannot afford it now.

As long as we cannot solve this problem, we are all paying a hidden tax to cover uncompensated care, to make up for lost productivity and to cover the costs of services to families torn apart by illness or medical debt.

Our hidden tax makes it possible for some large employers to make huge profits by keeping their labor costs low. And this isn't fair.

The Proposed Bill before you requires large and medium-sized employers to either provide affordable health insurance to their workers or to pay a fee to the state to help cover the costs of providing insurance through a state-run insurance program. We think that's fair.

We support the goals of this Legislation and stand ready to work with members of the General Assembly to shape a program that provides quality, affordable health insurance to all workers and their families in Connecticut in the most fair and cost-efficient manner.

Thank you.

SEN. PRAGUE: Thank you, Leslie. As always, that's some testimony.

LESLIE GABEL-BRETT: Thank you, Senator.

SEN. PRAGUE: Any questions from Committee Members? Representative Ryan?

REP. RYAN: In your testimony, you said 65% of the health insurance coverage of the employees. So I'll just make the assumption that the other 25% is self-insured. What makes up the other 25%? Some don't get it at all, so at least 25%--

LESLIE GABEL-BRETT: Sixty-five percent is provided by insurers. Approximately 18% is covered by Medicare. Of course, that's elderly people in Connecticut. Medicaid covers 3.1, and that should make up 100%, because I'm giving you percentages of health insurance that's provided. That's not percentage of people. That's percentages of policies.

REP. RYAN: Oh, I see. Thank you.

SEN. PRAGUE: Any other questions from Committee Members?

LESLIE GABEL-BRETT: Thank you.

SEN. PRAGUE: Thank you very much. At this point, we will go to our Agenda to the public. Sonya Schwartz is a visiting, invited guest from Families USA, and Ellen Andrews from Connecticut Health Policy Project, and Bev Brakeman from Connecticut Citizens for Economic Opportunity, will address the Committee as a panel. And the first speaker will be Sonya Schwartz. Thank you for coming, Sonya.

SONYA SCHWARTZ: Thank you, Members of the General Assembly for having me here today. I am really pleased to speak about the Employee Health Security Act today. I wanted to mention that I work at Families USA. We're a national organization for healthcare consumers based in Washington D.C. We work on both public and private health insurance coverage, employer sponsored coverage, coverage that people buy on their own in the individual market, and Medicaid, and Medicare, and programs like HUSKY in Connecticut.

I am an attorney and health policy analyst at Families USA, and I work mostly on trying to figure out ways to offer coverage for people who are uninsured in this country.

So first off, thanks for introducing me in Employee Health Security Act. I wanted to quickly give three main reasons why I think this is a really good step forward for Connecticut.

First, as you know, workers are losing access to employer-sponsored health coverage all around the country. And the Employee Health Security Act can reverse this trend and stem the loss of employee-sponsored coverage.

As you know, most Americans, 61%, get health coverage through their jobs. And employer-sponsored coverage is really the bedrock of our health system in the U.S. right now.

But at the same time, there's a disturbing trend going on in which workers are losing access to health insurance on the job. And from 2001 to 2003, the percentage dropped from 67% of workers who got their health insurance on the job to 63%. And Connecticut really follows this trend, where in the last three years, coverage has dropped by 2%.

Another issue is that across the US, only 57% of employers are actually offering coverage to their workers. And in Connecticut, we're not that much ahead, but you're slightly ahead at 62% of employers offering coverage.

Another problem right now in the employer-sponsored coverage market, is that workers are being asked to pay a greater share of the cost of their health coverage.

They're either being asked to pay more out of pocket on the front end in terms of the premiums that they're paying, or they're being asked to pay more in terms of steep deductibles and cost sharing.

And I included some of the statistics in my testimony. I won't go into it, because we have such limited time. But those are disturbing trends.

The Employee Health Security Act can help keep insurance affordable for low-income workers in two ways. First, by including a provision that sets premiums for low-wage workers at a maximum of 5% of their wages that makes sure that workers can afford to enroll in the plan.

And second, by establishing a standard of health coverage that is adequate, that will make sure that other cost-sharing does not make accessing care on the back end unaffordable for workers.

The second thing I just wanted to mention is the low-wage workers are much more likely to be uninsured that higher-wage workers. And the Employee Health Security Act will provide coverage, in particular, to these vulnerable workers.

So as you might imagine, low-wage workers are less likely to receive health coverage than higher wage. Nearly half of workers nation-wide who don't have health insurance earn less than $10 an hour.

In Connecticut, like everywhere else, low-income families are much more likely to be uninsured.

Because the State's public programs here, like HUSKY, provide a safety net for the poorest families, and Medicaid as well, working people in Connecticut who earn slightly more than the poverty level, $12,000 to $21,000 or $22,000 a year, are much more likely to be uninsured than the poorest families or richer families.

And so it's really important to look at this population and figure out how to make coverage affordable for them and have them enroll. The Employee Health Security Act would alleviate this inequity by requiring that employers, regardless of the wages that they pay their workers, provide health coverage.

I also just wanted to say that Connecticut would become part of a growing movement of states and cities that are looking at initiatives like this in order to make sure that employers do the right thing and provide health coverage for their workers.

The Employee Health Security Act would be a great addition to this movement. It makes it easier for employers that are already doing the right thing and providing health coverage to keep providing this critical benefit to their workers as well by leveling the playing field.

You may know that under ERISA, the Employee Retirement Income Security Act, a federal law, you can't just go ahead and mandate that employers provide coverage to their workers. That's printed by ERISA.

So you have to give them a choice of providing coverage or paying a fee to the state to provide coverage. But that's why a lot of states have worked “pay or play” laws like this, as a way to extend coverage. Because you can't just use strict mandate, because of a federal law that gets in the way.

As you probably know, California, more than a year ago, passed Senate Bill 2, a law very similar to this that would have required large employers to provide health coverage.

And passed by the Legislature, signed by the Governor, unfortunately was put to a ballot referendum where, even though the businesses that opposed the law outspent the consumer side by a lot of money, the consumers had almost won.

It was a very narrow margin in which the law was overturned by. And so that showed that people are starting to learn that this is important, and they're focusing on this, even when the industry can outspend the consumer side.

Similar to California's bill, Massachusetts has recently introduced a law that includes an assessment on employers to have to provide coverage to people in Massachusetts. Washington State introduced a similar law, and it's going to be reintroduced at this session.

And cities are also looking to similar initiatives. In New York City, there's a very similar law that's, I think, passed by the Committee already, that would do something very similar, but it's targeted to service workers in New York City, so just to know that you're not alone.

And I just wanted to say that I think there are a couple key reasons, again, why this is critical. I think it's really smart to focus on large employers, where a majority of them are already providing coverage and really levels the playing field, and ask them to provide coverage that meets a reasonable standard, or ask them to pay a fee.

Unfortunately, now employers that do the right thing and provide coverage are left to compete with employers who are able to charge less for their goods and services, because they don't provide health coverage, and I think that's unfortunate.

I think the Employee Health Security Act is a really good way to make the cost of providing health coverage part of large employers standard counts of doing business in Connecticut.

So anyway, thank you very much. I congratulate you for working on this great effort, and I'm happy to answer any questions.

BEVERLEY BRAKEMAN: Thank you, Senator Prague, Representative Ryan, and Members of the Labor and Public Employees Committee. My name is Beverley Brakeman. I'm the Director for Citizens for Economic Opportunity, a coalition working a corporately responsibility and healthcare.

The Employee Health Security Act has three important public policy objectives, to level the playing field for employers who provide healthcare but must compete with employers who do not, to expand access to affordable health coverage for workers with low and moderate incomes, and to ensure that large corporations are contributing their fair share to the health security of their employees.

Workers at some of the largest employers in our state are heavily dependent on state-funded healthcare like HUSKY. Why? Because these employers are choosing profits over people, and the taxpayers of Connecticut are footing the bills.

As you know, last year alone, Connecticut taxpayers paid $20 million for over 10,000 workers at large companies like Wal-Mart, Stop & Shop, Dunkin' Donuts, Laidlaw, and McDonalds. This is not just a problem for workers. It is a significant problem for businesses that do provide insurance for their employees.

There are several studies done that I've cited in my testimony that you can read about that show when companies like Wal-Mart move into a community, other smaller businesses, and even larger businesses, will close and go out of business.

The only way to level the playing field is to ensure that large employers are contributing fairly to the cost of health insurance for their workers. This prevents a race to the bottom in which big corporations eliminate their competition by denying health benefits to their workers.

We want Connecticut to hold its corporations responsible for the health security of their employees. As a result, we are suggesting that the following concepts be considered when discussing this bill for future pass through the Legislature. They are as follows, and these are in your written testimony.

Employers with 100 or more employees that are already providing coverage to their employees must provide proof that all of their employees are covered or otherwise accounted for. And that such coverage is substantially equivalent in either cost or quality to the State Employee Health Plan.

Additionally, we would suggest that this Legislature research which program would best suit the needs of uninsured workers at the eligible firm. In this proposal, we use MEHIP, we're suggesting that HUSKY might be a better buy-in program for this particular health security Act.

Additionally, employers with 100 to 250 employees provide health coverage for the employee only. Those employers with 250 or more would provide coverage for employee and dependents.

We suggest, also, that part-time employees, in all companies, be eligible for coverage, and the employer pay a pro-rated portion of their cost based, perhaps, on the number of hours they work.

And, finally, in order to save money and continue to level the playing field for small employers, we think optional HUSKY buy-in choices should be considered and researched by this Legislature for employers with fewer than 100 employees.

The benefits to the Employee Health Security Act to the State of Connecticut are numerous. We estimate an additional 50,000 to 66,000 working uninsured individuals employed in firms with 100 or more employees would become insured through this proposal. Large employers will be required to pay their fair share, thereby leveling the playing field for smaller employers.

Enhanced health security for employees currently receiving employer-sponsored benefits. Employers will have to have access to one of the better health plans offered in the state. And we look forward to continuing to work with this Committee to develop this proposal into a significant proposal that expands and stabilizes all worker's health security.

Thank you.

ELLEN ANDREWS: I want to thank you, Senator Prague and Representative Ryan and Members of the Committee. I'm Ellen Andrews from the Connecticut Health Policy Project. We're a nonprofit. We're in New Haven, but we operate statewide, and we work on guaranteeing access to affordable healthcare for every Connecticut resident. And I want to take this opportunity to thank you for hearing this critical bill, Senate Bill 1147.

The top five employers of HUSKY workers cost Connecticut over $20 million every year, covering almost 10,000 of their workers and family members.

If just these five companies stepped up to their responsibilities, the state would save most of what is needed to keep the 13,000 HUSKY parents, working parents, in Connecticut on the program now after July 1^st, which I also want to thank you for.

These are very large, very profitable companies. These are not small businesses struggling to get by. And none of these companies in the top five is based in Connecticut.

The answer to this is not, however, to just to do away with HUSKY parents' coverage, as has been suggested. While this is a large number of working families, this is still a small percentage of the 91,000 adults on HUSKY that are now getting covered living under the poverty level, or very close to the poverty level, and they are struggling to survive.

The answer, also, is not premium assistance, as has been suggested. Premium assistance has been tried in several states. It doesn't work, and, thus, one of the best things you can say about it, actually.

The idea is that the state would buy into a parent's company plan rather than providing HUSKY. It hasn't worked in other states, states with mature HUSKY programs, for a variety of reasons.

The administrative costs are very expensive, enrollment has been very low, employers are reluctant to participate, there's a very large paperwork burden on them, they have to meet certain standards of cost and benefits, and, actually, HUSKY is an exceptionally good deal.

The state pays a little over $2,000 a year for a very nice comprehensive benefit package. And most employers would be thrilled to get that kind of a deal to be able to buy into it. And I think that's one of the most attractive pieces of this Legislation that you're looking at.

The other piece about premium assistance is even if you could find the place where it's cost effective now, small business premiums went up 13.6% last year. HUSKY went up 3.6%. And that trend has been true since we've been tracking it, that HUSKY does not go up as fast as small business premiums have.

And so eventually the state will end up paying more under premium assistance, even with the employer subsidy, than we would have just providing HUSKY to families. And there's a breakout in one of my appendices that goes with my testimony to demonstrate that for various sized families.

Basically, the bottom line is that there are some companies that are very large and very profitable but are not providing coverage to their workers, and they should be. And the state is also picking up the tab for some of those workers, and they shouldn't be.

Americans feel strongly that people should get their health coverage through their jobs. They believe that health coverage should come with a job. They also believe strongly that everybody ought to have coverage, not only because it's the right thing to do, but because they also understand it's the cost effective thing to do. And this bill puts both those two values together and gives everybody coverage through their jobs or coverage through HUSKY. So I urge you to support the bill.

REP. HETHERINGTON: Thank you, Madam Chair. I wondered, of these five large corporations that are listed here, do you have any information as to what they pay in taxes to the State of Connecticut?

BEVERLEY BRAKEMAN: We don't, actually. It's very hard to look at corporate taxes. You can get them sort of in an aggregate, but it's very hard to break it out by individual companies. So we know what their profits are, but we have not found a way to find out what their taxes are.

REP. HETHERINGTON: Thank you.

ELLEN ANDREWS: It's actually something that you shouldn't be able to find out how much an individual pays in taxes. But corporations are shielded in the same way under the law. So we couldn't find that out.

BEVERLEY BRAKEMAN: However, you do know there's a number of bills in the Legislature that would address the issue of corporate tax disclosure, which we would certainly support for trying to get that information.

REP. ZALASKI: Thank you, Madam Chair. I wanted to ask, when you say $2,000 per year, is that per person?

ELLEN ANDREWS: That was last year. It's gone up a little bit.

REP. ZALASKI: That is a big deal. Where I work in my factory, we pay a lot more than that.

ELLEN ANDREWS: Well, it's the largest purchasing poll in the state, 322,000 people. That's a lot. It's one in every four persons in Connecticut is covered under HUSKY. I think it's one in every five children in the state are covered under HUSKY.

REP. ZALASKI: Thank you.

SEN. PRAGUE: I have a couple [inaudible - microphone not on]

SONYA SCHWARTZ: I'll try to be really quick. Hawaii has the prepaid healthcare act, and, actually, if you've got the orange tool kit, I don't know it if it was passed out, but in the orange tool kit, there's a whole little section that has a little case study about why, but I'll give you the very short version.

SEN. PRAGUE: Sonya, excuse me. [inaudible - microphone not on].

SONYA SCHWARTZ: Okay. I can try to when we're done--

BEVERLEY BRAKEMAN: They're in your office now. I'll go get them for you.

SONYA SCHWARTZ: Let's just try to make sure that everyone gets one. There is a case study about why. But in a nutshell, Hawaii has something called the Prepaid Healthcare Act in the 1970s. And there were some legal issues around ERISA, and then they were finally able to get new exemptions that they could actually do.

But we also state that in the country that can do a straight mandate where it requires all employers to provide health coverage to their workforce. And I would think if it's been implemented and has the state in the country with the highest rate of employers who provide coverage, obviously, because they mandate it, but also the uninsured rate has been kept down, even through some tough times in Hawaii.

Hawaii suffered a lot when Japan's economy went down and the tourist industry fell apart for a short time. And also as the industry has switched from agricultural to tourism, there have been some issues with their economy, but people have remained covered. And so it's really promising in that way.

If you look at health indicators, which are shown in the case study, you'll see that in terms of people visiting the emergency room, the number's far lower than the national average in terms of healthy births and healthy birth weights. It's a shining example.

And so, actually, employers are not that frustrated with the Prepaid Healthcare Act. They've learned to provide coverage, and they've learned to live with it. The only thing they're frustrated about is that the percent of the premium that workers are allowed to pay in Hawaii is only 1.5%. And when it was passed, that wasn't a problem, because the cost of health coverage was much lower.

But as the cost of health coverage has gone up, 1.5% is really low compared to the national average. So employers would like more flexibility to charge workers a bit more. So that's really the main issue, politically, right now, as far as I can tell from the news clips and what I hear from Hawaii.

In California, their bill was very similar to the draft of the bill that's currently filed here in Connecticut. However, employers with more than 50 workers would have had to provide coverage. And I believe dependent coverage would have had to be provided when employers had more than 200 workers.

One other difference was there would have been a state purchasing pool created where people would get their coverage if the employer wasn't providing it. But otherwise, it's quite similar to your Bill.

In Massachusetts, there's kind of a more comprehensive effort that with those ask employers to pay a percent of payroll taxes to then fund health coverage for workers who aren't covered, in addition to some expansions of their public programs I believe it's called [inaudible], and there's some other things all at once. So that's the more comprehensive approach.

But I'm trying to think. In New York City, they also have something pending that's very similar. In Washington State, the “pay or play” is much as it is in California.

And you wanted me to talk a little bit about Maine?

SEN. PRAGUE: Please.

SONYA SCHWARTZ: Maine has something called the Dirigo Health Plan, which has only been around for about a year and a half. So it's really just been implemented now. However, it's a really exciting way to actually provide coverage for small employers.

Rather than focusing on large employers, it makes health coverage more affordable for small employers by bringing in federal funding through Medicaid and expanding it. Also asking small employers to pay a share and workers to pay a share.

That's the sort of easiest way to describe it. But it's a different focus than an effort like this to go after large employers. But mostly it's designed to help small employers, actually, who are having trouble bargaining and buying coverage on their own. It's a volunteer, also.

I didn't describe Dirigo correctly. It's completely voluntary. Employers don't have to do anything different if they don't want to. It's just providing a tool for them to provide coverage if they want to.

SEN. PRAGUE: So that's quite different.

SONYA SCHWARTZ: It's quite different, yeah.

SEN. PRAGUE: In Massachusetts, a percentage of the payroll taxes goes into a fund, is that it?

SONYA SCHWARTZ: I believe that's 4% or 5%. I believe it's for large employers, but I'd have to double check. Because I haven't been following it closely.

SEN. PRAGUE: Check that out. It's interesting that other states are already beginning to do this. Be nice if we passed our bill that we wouldn't be far behind.

SONYA SCHWARTZ: You could be a leader. Aren't you the richest state in the country?

SEN. PRAGUE: Yes, we are.

SONYA SCHWARTZ: Be a leader there.

SEN. PRAGUE: Yes, we are. Are there any other questions from Committee Members? Thank you very much.

SONYA SCHWARTZ: Thank you.

SEN. PRAGUE: Our next speaker is Hugh Pemberton.

HUGH PEMBERTON: Good morning, Senator Prague and Representative Ryan and the Committee. I thank you for allowing me to testify here today. My name is Hugh Pemberton, and I am President of Tempo Staffing, a staffing firm located here in Hartford.

And unfortunately, I'm not one of the sides that got listed in your thing. I wish I was, to tell you the truth. But we employ over 750 individuals each year.

The staffing firms, such as mine, recruit and hire our own employees and assign them to other organizations to support or supplement their workforces or to provide assistance in special work situations, such as employee absences, skill shortages, seasonal workloads, or to perform special projects.

Last year, firms like mine in the State of Connecticut employed over 122,000 workers, and of that number, 72%, or almost 88,000 people, moved on to find permanent employment.

Staffing firms like Tempo Staffing create jobs. We are the jobs people, and we are essential to the fundamental well-being of Connecticut's economy.

If Senate Bill 1147 becomes law, the added cost of providing insurance will reduce the demand for our services and will severely jeopardize the jobs we provide.

In my firm, we have about a 600% turnover in one year, and considering all segments of the industry through the nation, it's almost 400%. This bill will be a major burden to us to determine who is eligible and when they are not.

Now I can only speak for my company, but this added cost will make it impossible for us to continue.

We are presently placing mostly unskilled people in work situations where they can have a chance to get a permanent position. These people have no opportunity to find work on their own, and their loss will mean a loss of between $1 million and $1.5 million of payroll going into the north end of Hartford each year.

The Legislature should focus on helping to lower healthcare costs so employers can afford to provide their employees with a voluntary benefits package. Senate Bill 1147 would result in even further escalation of healthcare costs, because it does not include any cost containment provisions.

Now is not the time to impose costly mandates that will drive more businesses out of Connecticut and stifle job growth. I urge you to oppose Senate Bill 1147.

Thank you, again, for this time.

SEN. PRAGUE: Okay. Any questions from Committee Members? Representative Guglielmo, did you--

SEN. GUGLIELMO: No, I'm all [inaudible - microphone not on]

SEN. PRAGUE: I'd like to ask you a question. First of all, did you hand in your testimony by any chance?

HUGH PEMBERTON: Yes, I did. I gave 40 copies to the--

SEN. PRAGUE: To the clerk? We don't seem to have it, but we'll get it. People who work for you, when you place them with companies, with agencies, do they work short periods of time, or--

HUGH PEMBERTON: Obviously.

SEN. PRAGUE: Two weeks, three weeks, three months, six months?

HUGH PEMBERTON: Yes. I mean we have a 600% turnover. Part of that's because they move on. Part of it's because the job's a short term.

SEN. PRAGUE: What's short term?

HUGH PEMBERTON: We would work four hours, if you wanted it. We work anything from four hours to months, depends on what the customer wants.

SEN. PRAGUE: What's the average length of time that your workers work for a company?

HUGH PEMBERTON: I'm going to say around 150 or 160 hours. Three or four days.

SEN. PRAGUE: Maybe 20 days. Maybe. Stretching it.

HUGH PEMBERTON: Yeah, okay.

SEN. PRAGUE: Eight hours a day into 156? Okay, we'll have to think about that. I'm glad you brought that issue to our attention. If they go on, they usually go to work in a permanent job?

HUGH PEMBERTON: Yes. Yes, they do. Could I just comment that the American Staffing Association just sent me a thing. We're holding a meeting in Washington on May 18^th, and all the staffing members will be invited to that meeting.

And the focus would be discussing how to overcome the impairments to coverage, which temporary workers tend to be younger, healthier, and opt out of the coverages we offer to maximize their take-home pay.

There is no practical way for us to maintain traditional employer health plans for employees who work very short periods of time, and the cost of most of these coverages are prohibiting for our members. So we're trying to have a mean panel discussion, and so forth, for all of the existing members to discuss how we might [inaudible].

And we have several insurance companies, and so forth, represented to discuss how we might comply reasonable plans for our workers. So it's not something we've ignored. It's just something we can't afford.

SEN. PRAGUE: Are there other questions from Committee Members? Representative Ryan?

REP. RYAN: You're an agency that finds employment for other people. So are they technically your employees?

HUGH PEMBERTON: Yes.

REP. RYAN: You take out their taxes--

HUGH PEMBERTON: We're a labor contractor, I think, is the term used here in Connecticut. Where we provide the labor to various companies, they have the care and the custody of the employee. In other words, they're supervising them. We provide all of the payroll, the workers comp, all those kinds of things.

REP. RYAN: That's why the agency should take care of all that for you.

HUGH PEMBERTON: We take care of their taxes, and that type of thing.

REP. RYAN: Thank you.

SEN. PRAGUE: Any other questions? I would just like to ask you one more question that suddenly occurred to me. Do you ever put employees out to work in retail establishments like Wal-Mart?

HUGH PEMBERTON: I would if I could. We actually have worked in Sam's Club here locally, so, yeah, we do.

SEN. PRAGUE: So if you send employees to work at places like Sam's Club, do they stay there six months, a year?

HUGH PEMBERTON: Well, they stay there usually. I just addressed the last person we had at a Sam's Club. They were putting away the carts from the parking lot. So they were there at that job maybe three months, and then they hired somebody. You know, I don't know and I can't tell you whether they hired that person or somebody else.

SEN. PRAGUE: Do they pay your employees that you place there--

HUGH PEMBERTON: No.

SEN. PRAGUE: --what they pay their regular employees?

HUGH PEMBERTON: Oh. I have no idea what they pay their regular employees. I may be paying them more than they do. Our average pay rate is about $7.68 an hour, I think.

SEN. PRAGUE: So the company pays you a set rate, and then you pay the people that you place?

HUGH PEMBERTON: Right.

SEN. PRAGUE: Out of what the company pays you?

HUGH PEMBERTON: Right.

SEN. PRAGUE: Okay. So your average pay is $7.68 an hour?

HUGH PEMBERTON: Right. And that's because I have 110 competitors who would all offer that. So it's not like I set the rate. When I go to call on them, I have to compete with the other people in the business, and I think you're going to hear from the gentleman coming up next that he probably would be right there to take the job.

SEN. PRAGUE: Okay, Mr. Pemberton. Thank you very much for coming in. Oh, Mr. Pemberton, Representative Belden wants to ask you a question.

HUGH PEMBERTON: Sure.

REP. BELDEN: Good afternoon, Sir.

HUGH PEMBERTON: Good afternoon.

REP. BELDEN: Your average wage, as you just mentioned, there's another bill pending before the General Assembly increasing the minimum wage to, I believe it's $8.00. What effect would that have on your ability to place people?

HUGH PEMBERTON: Well, why don't you just make it $20? We've screwed around with this minimum wage forever, and, you know, I think they just decided not to raise it at the federal level.

Why do we have a federal minimum wage, and we have a state minimum wage? And the state minimum wage already is $2 over the federal. And every time you raise the minimum wage, you drive out some of these workers that work for me.

They will not get a job. Because what happens is the guy that would have been there to sweep the floor or doing one of these jobs, now the supervisor gets told he gets to do it on his way out the door. And they just added somebody else's job, and then I lose that worker.

It's not small. It's kind of behind the thing, but even some of these companies you're talking about, these are large companies that are making large profits, they also are going to see that they don't need one cook. So we're going to reduce the number of people by raising the minimum wage.

I can tell you from my standpoint, when I first went into business in the staffing business a number of years ago, I about died the first time you raised the minimum wage because it scared me to death.

I thought, jeez, I'm having enough trouble trying to sell my customers. How am I going to tell them that I'm raising the rate?

It was the easiest sale I've ever made because you did it. It wasn't me. I didn't do it. You did it. So, obviously, I had to get more money for it. So I was able to sell that.

But, you know, at $8, they're not going to buy $8 people for some of these jobs. They're just not. And if you want to know why jobs are leaving this country, you keep doing these kinds of things, and look up one of these days, and we'll be the only ones here to shut the doors.

REP. BELDEN: I thank you for you opinion. I just wanted to get--

HUGH PEMBERTON: I didn't have very many facts for that one.

REP. BELDEN: I understand. But I just wanted to get somebody that's dealing in the labor market out there in this area. Thank you.

REP. BELDEN: Thank you.

SEN. PRAGUE: Representative Zalaski.

REP. ZALASKI: As you speak more, we find more questions for you. Thanks for coming up here today. I just wanted to ask you, you made a comment about your average is $7.68, because that's what the market presses for. If it was up to you, you'd pay less. Is that right?

HUGH PEMBERTON: No. I would pay more.

REP. ZALASKI: You would?

HUGH PEMBERTON: I can't get any more for the people. It's not a matter of wanting to pay less. In fact, I think if you were to come to my office and follow how I do the pricing, you would be surprised at how much I try and give the people. I'm trying to save these peoples jobs.

REP. ZALASKI: I wasn't here when we passed Raised Memo Wage the last time, but from every indication I get, many of the people said that that was going to lead people to not have jobs, but we found that that has not occurred. And we don't believe it will occur now when we raise the minimum wage again this year. Thanks.

SEN. PRAGUE: Thank you very much. Mr. Welle? Mr. Matt Welle?

MATTHEW WELLE: Good afternoon, Senator Prague, Representative Ryan, and Members of the Labor Committee. And I'd like to start by thanking you for giving me the opportunity to speak today.

My name is Matthew Welle. I'm the District Manager for Labor Ready. Labor Ready is a staffing company with nine offices in Connecticut. We specialize in, similar to the previous speaker, same nature of business.

In 2004, we put more than 5,315 people to work. Meanwhile, businesses operate more efficiently by being there work force as their needs fluctuate.

Labor Ready contributed more than $6,185,000 to the state's economy in 2004. Our employees work an average of 154 hours before finding permanent employment or moving on.

Jobs provided by staffing agencies throughout Connecticut are essential contributors to the condition of Connecticut's economy in providing entry-level positions and giving people opportunities to get into these entry-level positions and develop further into longer-term employment positions.

If Senate Bill 1147 becomes law, the added cost of providing insurance on our employees will definitely hamstring us in operations in Connecticut. It will definitely jeopardize our business operations in Connecticut.

I respectfully urge you to oppose Senate Bill 1147, and thank you very much for your time today.

SEN. PRAGUE: Are you that agency that sends that Bob guy in. You know, how he always asks if Bob is here?

MATTHEW WELLE: I'm sorry. I'm not familiar to what you're referring to.

SEN. PRAGUE: I'm just joking. There's always this advertisement where it says, you know, I've got a cold and I can't come to work today, and the boss says, don't worry.

MATTHEW WELLE: Actually, that is not us. No, that is not us.

SEN. PRAGUE: I guess you have the same argument about this bill as Mr. Pemberton did.

MATTHEW WELLE: Yes.

SEN. PRAGUE: Something for the Committee to consider. Part of our bill says you cover part-time employees. But we didn't consider employees who work for two weeks or three weeks. So we thank you for your testimony.

MATTHEW WELLE: Okay.

SEN. PRAGUE: Can they buy into any kind of coverage? Do you have that available for them?

MATTHEW WELLE: We do not have that available at this time.

SEN. PRAGUE: Thank you. Representative Zalaski?

REP. ZALASKI: Thank you, Madam Chair. What's your average wage?

MATTHEW WELLE: $7.53.

REP. ZALASKI: $7.53. So a little less than the last gentleman.

MATTHEW WELLE: Yes.

REP. ZALASKI: How many managers do you have? You know, how many people do what you're doing? How many are like management in your place, just you?

MATTHEW WELLE: There's a manager in each office, and I'm a District Manager. And there are nine offices within Connecticut, and I'm a District Manager for seven of those. Two of those are part of another district, which also include Rhode Island and part of Massachusetts as well.

REP. ZALASKI: Do the managers have insurance?

MATTHEW WELLE: Yes. They are permanent employees of Labor Ready within Connecticut. And because we are in a permanent place and permanent position, it is feasible for the company to provide us with healthcare.

But with the nature of the temporary employment and being they last such a fluctuating amount from, as I stated earlier, from four hours to two weeks to six months, it's very difficult to make that feasible to provide healthcare for employees on short-term basis.

REP. ZALASKI: Is your place one of those places where you ride by and it says, work for cash, that day?

MATTHEW WELLE: Work today, paid today?

REP. ZALASKI: Yeah.

MATTHEW WELLE: Yes. We do provide paid-today options.

REP. ZALASKI: Thank you.

SEN. PRAGUE: Thank you very much. Oh, Representative Hewett. Sorry about that.

REP. HEWETT: I think you have one of your Labor Ready's at my desk in New London.

MATTHEW WELLE: Yes.

REP. HEWETT: Okay. Is your argument, also, that minimum wage would also hurt your business?

MATTHEW WELLE: No.

REP. HEWETT: It wouldn't hurt your business position? What are you at now, seven how much?

MATTHEW WELLE: I wouldn't say it would necessarily help it. But I can't say that it would hurt us either.

REP. HEWETT: It's only a few cents to get to that $8, right?

MATTHEW WELLE: Pardon me?

REP. HEWETT: It's only a few cents to get to that $8.

SEN. PRAGUE: Thank you very much.

MATTHEW WELLE: Thank you.

SEN. PRAGUE: Tim Phalen followed by William Moore.

TIM PHALEN: Good afternoon, Senator Prague, Representative Ryan, and Members of the Labor Committee. Happy St. Patrick's Day. For the record, I'm Tim Phalen, President of the Connecticut Retail Merchant Association.

We're a statewide trade association representing retailers throughout Connecticut. Our membership includes some of the world's largest retailers as well as many of the states mainstream merchants.

I'm here today to testify in opposition to the Bill you have before you, Senate Bill 1147.

As some of the other previous speakers have said, this bill would impose a costing mandate on all businesses, but we feel in our perspective that it unfairly hits the retail community. As you know, retailers in Connecticut employ [Gap in testimony. Changing from Tape 1A to Tape 1B.]

--the report that your office alleged I've researched, released, we feel has many flaws in it, some of which make the judgments about retailers that we believe are unfair, and, in many cases, we would question the methodology and ask to work with OLR to find out how they conducted their research to the questions they may have asked.

We also would remind the Committee that some other states have considered Legislation similar to this, in Washington State and in California, and that both of those have been rejected.

In closing, we think that this Bill unfairly, as we say, hurts retailers, and included in retailers, we would include the number of franchisees that are located throughout Connecticut that are small businesses that are operating in the state.

And we believe there are other alternatives that are available to help with the issue of healthcare and providing healthcare to employees. So that's the general statement I wanted to make, and if there are any questions or comments, I'd be happy to answer them.

SEN. PRAGUE: Thank you for coming in. Any questions from Committee Members? No? Seeing none. Thank you.

Next speaker, William Moore followed by Tom Swan.

WILLIAM MOORE: Good afternoon, Senator Prague, Representative Ryan, and Honorable Members of the Committee. My name is William D. Moore. I'm the Executive Director of COSTA, Connecticut Transportation Association, and we represent owners and operators of school buses and school transportation providers throughout the State of Connecticut. Our membership comprises nearly 100% of the providers in the state.

I'm appearing before you today to oppose Senate Bill 1147, AN ACT CONCERNING HEALTHCARE COVERAGE. And as previously submitted statements that I'm not going to read, but I would like to point out a few things that are concerning to us.

First is the new definition of large and medium employers. I think any reasonable economist would define a small business as one employing 100 or fewer. This stretches out beyond rationality.

Another issue that we're concerned about is that while it allows the credit for benefits provided, that credit's only allowed if the benefits that are provided meet or exceed those benefits that are provided to municipal employees.

The act does say that you can provide additional benefits beyond that. I would say that if you're mandated to provide benefits beyond those given to municipal employees, you're probably not going to need to apply additional benefits to the coverage you're presenting.

We're also concerned that this measure does not exempt employers of seasonal or part-time employees. That's patently unfair. Many employees do not want benefits, because their spouse may receive benefits through their place of employment.

Concern about the administrative nightmare that will likely be developed by trying to administer this new beurocracy. And we're concerned about the chilling effect that this would have on the state's economy.

The state is just now coming out of a rather terrible recession, as you know, and we're very concerned that this will send a wrong message to employers in the state, people considering moving into the state.

Recently, Browne and Sharpe announced that they were considering moving 100 good, high-paying manufacturing jobs into Southeastern Connecticut, and I'm just curious if anybody has checked with Browne and Sharpe to see what their views on this particular measure might be.

With that I'd be happy to take any questions that you might have, and thank you for the opportunity to appear before you. Thank you. Thank you very much.

SEN. PRAGUE: [inaudible - microphone not on] Committee Members? Representative Ryan?

REP. RYAN: Yes, Mr. Moore, I think just your fear about there being a new definition of large and mediums, I think for the purpose of this bill, those definitions are new, but it's not an overall change.

Did you look at Ms. Brakeman's testimony and some of the recommendations she was going to make?

WILLIAM MOORE: Yes, I did.

REP. RYAN: Were those more in liking of what you'd like to see in the bill?

WILLIAM MOORE: No. I'd like to see the bill thrown out, Representative. It's very hard to, I'm sorry, you probably had a longer question. I didn't mean to interrupt you.

We believe the benefits level should be set in the marketplace. Another interesting thing about as this whole controversy developed is, I'm thinking it occurs to me that just within the last couple of years, the state is actually encouraging employers in the private sector to make this HUSKY Plan available to their members. Excuse me, to their employees.

So it's now suggested that employers are doing wrong by doing that. Raises an interesting paradox.

SEN. PRAGUE: [inaudible - microphone not on]

WILLIAM MOORE: Yes, Senator.

SEN. PRAGUE: I would argue that the state wasn't pushing the HUSKY program on employees. It was because the employers are not offering healthcare, and the state was picking up expensive costs of emergency room care.

And, you know, people who were very sick who didn't have insurance at all, that the state encouraged people to look at what their incomes were, and that there was a state program to help them and their children, particularly for children.

So it's like what comes first, the chicken or the egg? But in this case, it was because the employers were not offering healthcare.

WILLIAM MOORE: And I'd be happy to provide you with a list of companies that have been contacted, that were contacted by the state, and were asked to inform their employees of the program so that they could participate in it.

SEN. PRAGUE: Could you do that?

WILLIAM MOORE: I'd be happy to do that.

SEN. PRAGUE: That would be something that I'd like to see, and I'm sure other Committee Members would like to see.

WILLIAM MOORE: I'd be very happy to do that.

SEN. PRAGUE: Please. Thank you. The other thing is is that people are covered by a spouse's insurance. You know, they're covered, so they wouldn't be included.

WILLIAM MOORE: I don't see that clearly in the Legislation. As I read the Bill, it requires every employer to provide this to all of their employees.

SEN. PRAGUE: Okay, you're right. We have been talking about this, our LCO says it's not yet in the Legislation, but it will be.

WILLIAM MOORE: Thank you.

SEN. PRAGUE: You bring up a very interesting issue of COBRA. Now we haven't talked about that at all, but you certainly have brought our attention to it. And we'll take a look at that.

WILLIAM MOORE: Thank you.

SEN. PRAGUE: Thank you very much. Representative Zalaski?

REP. ZALASKI: Thank you, Madam Chair. I just have to ask this question, and that is do you think it's fair that corporations that do make significant profits pass the law and the insurances off to the state to have to pay it, though? Do you believe that that's fair for the other taxpayers of the state?

WILLIAM MOORE: I don't believe that it's fair that that occur. No. But if it is something that is allowed, companies should not be prohibited from taking advantage of things in the law that are allowed.

If this law allows employers/employees to participate in their program, I don't thing that's necessarily a bad thing. I would remind you that employers pay far and away an enormous tax to the State of Connecticut. So it's not like the employers are not providing their employees a circle root type thing.

REP. ZALASKI: Thank you.

SEN. PRAGUE: Any other questions or comments?

REP. RYAN: I actually did. The companies with whom you deal, I mean do that many of them currently not give healthcare insurance? I was thinking with the transportation companies with whom you work with, the bus drivers, most of them already get some kind of healthcare, and this wouldn't really affect them. Am I wrong in that?

WILLIAM MOORE: Most provide, but some do not. Not all of the companies do provide. What this law is, as I'm reading it, mandates every employer to pay into the new pool, whether your providing it or not, unless you're paying a benefit equal to that of municipalities.

Now if you open up your municipal contract and look at the benefits, I don't think there's very many private employers that match the benefits being provided to municipal employees. I'm thinking of pharmacy co-pays, for instance, deductibles, things of that sort. So what your virtually doing is going to lump all employers into this hopper.

SEN. PRAGUE: [inaudible - microphone not on]

WILLIAM MOORE: Thank you, Senator.

SEN. PRAGUE: [inaudible - microphone not on]

WILLIAM MOORE: I appreciate that. Thank you.

SEN. PRAGUE: Our next speaker is Tom Swan followed by Bob Slate.

TOM SWAN: Happy St. Patrick's Day. Good afternoon, Senator Prague, Representative Ryan, and other Members of the Labor Committee. My name is Tom Swan. I'm the Executive Director of the Connecticut Citizen Action Group.

Today, I'm speaking not only as the Executive Director of CCG, but also as a member of the Healthcare for all Coalition and Citizens for Economic Opportunity.

I first want to start that I'm very happy that this Committee has previously, and will again, most likely not use temporary agencies as the barrier of how we decide how workers should be treated.

In addition, I'd like to point out that the school busses association is made up almost entirely of state contractors, where the bulk of the money is paid for by federal funds, and shame on us if our contractors are not providing healthcare for the workers.

Last week, the Legislature, by 124 to 22, and a 22 to 8 vote, and the Governor made a very strong statement about the importance of health security for Connecticut's families. And that is a priority for the state.

The subsequent articles on the cost to the state do this significant number of employees of large companies, and their dependents, enrolling in HUSKY should not have us ask if the program is needed. The question should be how can we fairly finance the healthcare of these and other working families?

Senate Bill 1147, with the amendments that were offered earlier by Beverley Brakeman, would provide this financing by having large companies, over 100 employees, that do not cover their employees, and that their employees are not covered by their spouse's care, pay their fair share to ensure that their employees and their families have health security.

This program would level the playing field for small businesses that must figure how to provide health security for families for their own operations.

This is a challenge that small businesses face every day. And Wal-Mart's failure to cover their employees gives them an unfair advantage over these small employers.

It would further assist small businesses, as described by Ms. Brakeman, by allowing them to buy into the HUSKY plan, and it will reduce the cost shift that these employers face from both uncompensated care and our current financing mechanism for HUSKY.

In addition, the federal match for qualifying employees can be used to support additional enrollment of part-time workers or to improve HUSKY. This proposal would impact a very small number of large employers.

OHCA's January 2005 report, “Connecticut's Health Insurance Coverage-Results of Small Business” through their survey found that over 93% of employers with 100 employees or more offer health insurance, and over 97% of firms with over 500.

However, according to this same report, over 13% of uninsured workers are employed at these firms without any stats on their dependents.

Furthermore, I'd like to point out that this type of proposal is becoming a major topic at healthcare circles. The Commonwealth Fund's February 2005 report, entitled “The Commonwealth Fund's Healthcare Opinion Leaders Survey”, found that 70% of those surveyed think that all employers that do not provide health coverage should pay into a fund to insure their workers and families.

This bill is only limited to employers of 100 or more. And 60% of those surveyed think that employers should be able to buy into a Medicaid HUSKY-style program, as Ms. Brakeman's proposed bill would allow.

In conclusion, our healthcare crisis is continuing to spiral out of control. We have a record number of uninsured, cost shifts to workers that results in millions of families suffering from real pay cuts due to increased health costs, and over 40% of bankruptcies are a result of healthcare costs, with a large number of those actually having insurance.

The February 23^rd edition of Health Affairs had an article on US health spending projections through 2014. It anticipates that in 2014, healthcare spending will constitute 18.7% of our gross domestic product compared to 15.3% today. And that public spending will make more than 49% of all expenditures during that period.

With this as a backdrop, it is imperative for the Legislature to step up and take action. A revised Senate Bill 1147 would be a major step in addressing our health crisis.

Gimmicks like HSA's and premium assistance programs will not provide health security and will only result in further cost shifts, not savings, and adverse selection. People understand that government needs to provide Connecticut's families with health security.

As a current Social Security debate is proving, we understand the concept of social insurance, and that we are all in this together. An amended Senate Bill 1147 will create a fair way to finance healthcare for Connecticut's working families, level the playing field between small and large employers, and assist small businesses in purchasing affordable insurance.

Thank you, and we look forward to working with you to provide health security for Connecticut's families.

SEN. PRAGUE: Thank you for your testimony. Any questions from Committee Members? No? Thank you.

TOM SWAN: Okay.

SEN. PRAGUE: Bob Slate? And Paul Hongo would be after Bob Slate.

I'm going to ask the panel members [inaudible - microphone not on]

ROBERT SLATE: Yes. I'm Robert Slate, Executive Director of COHI, Connecticut Oral Health Initiative, a broad-based coalition of health professionals, businesses, and community leaders dedicated to improving Connecticut's Oral Health system. And I'm here to testify in support of Senate Bill 1147.

First, if I can add, too, more personal comments, as somebody who has worked as a temporary employee in my past, as a long-term temporary employee, going from one temp job to another, temporary employees who are doing that for a living need health insurance as much as permanent employees.

I can't understand why we would think that somebody who's struggling to find a permanent job, and has to string together a series of temporary jobs as an alternative, would be less deserving or needing of health insurance for themselves or their families.

A second point, as someone who is now employed permanently and has three children in public schools who use buses, I would feel horrible if I didn't know that bus drivers who are responsible for my children's lives were not healthy and alert and comfortable.

The job of a bus driver is one position where you'd never, ever want to scrimp and cut corners and risk having people who don't have access to healthcare and dental care and mental healthcare.

That said, when my wife and I sit down to make tough choices about our family budget, there's one area where we don't cut corners. Broken toe or infected tooth, we get our kids the care they need.

Similarly, there can be no fiscal health for Connecticut without physical health for our state's residents. We know that smart dollars invested in preventive healthcare and most dental problems are preventable reap huge savings later in reduced need for emergency care. The average cost for a dental visit before age one is $262. This doubles to $546 when a child's first visit isn't until age four or five.

The facts are clear. There's an oral health crisis in Connecticut. Dental decay is the most chronic disease among our children. It's also the number one reason in older kids, and adults, that new military recruits cannot be placed on active duty.

One in four Connecticut children are on Medicaid, but two or three Connecticut children receive no dental care. And we now know that oral disease is an integral part of general health. Poor oral health can contribute to diabetes and to heart disease and to pre-term births.

So it's time for a reality check. We do, as we stated before, live in one of the wealthiest states in the nation. Yet many of our dentists find it impossible to take Medicaid patients. Reimbursement rates for those dentists are hopelessly low and haven't been adjusted since 1993. Some 300,000 poor children receive little or no dental care in Connecticut.

What an opportunity all of you and the Governor have. An entirely preventable medical condition, tooth decay, remains one of the most common chronic disease in Connecticut.

You can take the lead by instituting a more comprehensive healthcare system as is suggested by the progressive and exciting bill that you're considering today that includes oral health and that reaches some of our state's neediest, most underserved populations.

As a result, we will finally get our disadvantaged kids and adults into dentist's office and into general doctors offices. Oral health care for all, healthcare for all, is the ethical thing to do, it's the fiscally sound thing to do, it's the right thing to do. Please support Senate Bill 1147. Thank you.

SEN. PRAGUE: Thank you very much for your testimony. Any questions from Committee Members? No questions, but thank you very much.

ROBERT SLATE: Thank you very much.

SEN. PRAGUE: Paul Hongo?

PAUL HONGO: Good afternoon. My name is Paul Hongo. Before I begin, I would like to take this opportunity to thank Senator Prague and Representative Ryan, as well as all the Members of this Committee, for raising Senate Bill 1147, the Employee Healthcare Security Act.

As the President of Communication Workers of America Local 1298, I come here today to speak in support of this proposed legislation and the benefits it will bring to the workers, taxpayers, and responsible employers in Connecticut.

In theory, workers go to work for an employer. In doing so, they produce a product, provide a service, or perhaps deliver goods and materials. Regardless of what their job entails, they generate revenue for their employer.

In return, the employer provides a compensation package that recognizes and acknowledges their contribution to the success of the business. And if you subscribe to this theory, then I believe it's safe to say that this compensation package should include a respectable wage and affordable healthcare coverage.

In simple terms, it's a fair deal. Conversely, it's not a fair deal when an employer such as Wal-Mart chooses profits over its employees just so it can sell its products for less than their competitors, who are responsible employers and do provide benefits for its employees. Nor is it fair to make taxpayers foot the bill for state funded healthcare like HUSKY.

Not only is this not a fair deal, it's morally and ethically wrong. And it's time to pass Legislation that rights this wrong. Rights the wrong for Connecticut's taxpayers, rights the wrong for Connecticut's responsible employers, and rights the wrong for Connecticut's workers.

In closing, I urge you to support Senate Bill 1147 and the age-old theory, an honest day's pay for an honest day's work. And part of that honest day's pay should include affordable healthcare coverage.

Thank you for listening and for your consideration.

SEN. PRAGUE: Thank you. Any questions? I didn't think you were old enough to remember that saying, an honest day's work. Okay, an honest day's pay for an honest day's work. But, you know, Mr. Hongo, you're absolutely right. And again, I want to thank you for taking the time to come in to testify.

PAUL HONGO: Thank you.

SEN. PRAGUE: Do the SBC workers have healthcare?

PAUL HONGO: Yes, they do.

SEN. PRAGUE: That's good.

PAUL HONGO: They do. But it's always an issue that comes up on the table. And we're always compared to those that are not providing healthcare.

It wasn't that long ago I had a one-on-one conversation with the President and CEO, Ed Whittaker. And Mr. Whittaker said, you know, I believe in union. I believe in having union workers because it brings something to the business. You know, they're an educated workforce, they're trained, skilled. By providing benefits it sends people to have a career, to be loyal.

But his competition, like a Wal-Mart, doesn't provide benefits. And that's what you're competing against. It's a fair issue. It's an issue about being fair.

SEN. PRAGUE: I agree. Thank you.

PAUL HONGO: Thank you.

SEN. PRAGUE: Eric George followed by Dennis O'Neal and then Paul Filson.

ERIC GEORGE: Good afternoon, Senator Prague, Representative Ryan, Members of the Committee, my name is Eric George, and I'm the Associate Council for the Connecticut Business and Industry Association.

I'm joined here by Bonnie Stewart, Council to CBIA. We're here not only representing CBIA, but about 61 other business organizations throughout the State of Connecticut, and our opposition to Senate Bill 1147.

We oppose Senate Bill 1147 because it fails to recognize and address the true barrier to healthcare, and that is the unaffordability of healthcare.

The cost of healthcare has been skyrocketing for years, and Senate Bill 1147 establishes a tax without addressing the primary concern that employers, employees, everyone who is interested in increasing access to healthcare, and that is its cost.

We would like to see this Committee, and this Assembly, address the cost drivers that are behind the cost of healthcare, to take a look at the current mandated providers and services that you have on the books, to look at the medical malpractice system and the other drivers, to look at other flexible designs.

Establishing a tax of this nature does not address the fundamental problem, and that is the cost.

Those are the comments that I wanted to give to you and allow you the opportunity to ask any questions that you'd like.

SEN. PRAGUE: Thank you very much for your testimony. Any questions from Committee Members? Representative Zalaski?

REP. ZALASKI: Thank you, Madam Chair. I quickly looked over your testimony, and I guess at one time you thought it was going to be 20 or more employees?

ERIC GEORGE: Actually, under the bill, I think it does contemplate 20 or more employees provided a tax credit is established. I do believe that is in 11 [inaudible].

REP. ZALASKI: Oh, yeah. Well, it says 100 anyway. I'm looking at this thing. It says 100 in there. So knowing that it was 100 employees, how many members of CBIA would you estimate it would, if you know.

BONNIE STEWART: Ninety percent of CBIA's members have 50 or fewer employees. So it would affect less than 10% of our members. And that's understanding that some of them wouldn't be impacted by the measure as well.

REP. ZALASKI: So Tom Swan from CBIA, in his testimony, Tom Swan, anyway, in his testimony said 97%, or 93%, of companies over 100 already give insurance. How about the other 61 organizations that you said there's another 61 Connecticut business and trade associations? Is there also 90% of those--

ERIC GEORGE: Oh, we'd have no way of knowing their breakdown.

BONNIE STEWART: But it's fair to say that the bulk of employers in this state are small businesses. Small businesses are the, you know, driver.

REP. ZALASKI: Right. But that's why I think we wrote this as 100 or over. But you do understand what the problem that we have. If you have a corporation that's one of the biggest moneymakers in the world, how could you possible feel that a business like that shouldn't pay their fair share, as far as healthcare goes, for their employees?

They wouldn't be making any money if it wasn't for the employees that work for them. Do you feel that that is true or what's your feeling on that? A corporation that makes significant amounts of money, profits, how could anybody tell us that they shouldn't have to pay their fair share for the employees that work for them? I mean I just find that hard to believe. Do you have a response for that?

BONNIE STEWART: Just to point out, just because a company is a large company, and I know what you're talking to, we're not going to speak for that company, they're not members of ours, but just because a company's a large company doesn't mean that they are any more profitable than a small company.

The size of a company doesn't always correlate with their profitability. Having said that, we know from surveys we do with our members on a regular basis, that, again, the issue regarding healthcare coverage is really one of the affordability is cost. Whether it be the employees who choose to opt out or an employer who is not able to afford it.

That's why when we're up here talking, healthcare is our members number one issue. We always want to get across the point that we understand that healthcare coverage is an important issue.

But in order to address that issue, we need to address the issue of cost. And that's what our message is. Our message is we need to look at the mandates, which are a significant cost driver for healthcare.

We need to look at the issue of medical malpractice, which, again, is another significant cost of healthcare, and allow for flexible benefit plans so that they meet the needs of both the employer and the employee, in terms of making a healthcare coverage system that is affordable for people to opt into.

REP. ZALASKI: I appreciate what you have to say, believe me. But it just seems to me that when you have people who are uninsured, they go to the hospitals, and they're uninsured, they have to get help or care. We, the people that are insured, are paying the bill.

So doesn't it seem better to get them into a HUSKY-type plan? We already said that how affordable the HUSKY plan is. If we could get more people into those plans, it's going to make it better for all of us. I mean don't you think? I know you guys sell insurance, but--

BONNIE STEWART: We do. And actually we probably benefit from a business standpoint from a bill like this. Having said that, we feel opposed to the measure, because we think it's bad public policy.

What we are trying to address is the real issues behind this, the true barriers to health coverage, which is cost. And, unfortunately, the measure before you, and both of the measures before the legislature this year regarding healthcare coverage, don't do that.

They either increase cost or ignore the facts completely. And what we're asking you, as a people who actually do more providing in terms of the employers, are the bulk of the people that bring healthcare to individuals in the state, and to look at those cost issues, and address those issues so that more people do have access to health coverage.

REP. ZALASKI: Thank you for your response.

BONNIE STEWART: You're welcome.

SEN. PRAGUE: Any further questions from Committee Members? I have a couple of questions. You knew, Bonnie, that I was going to ask you a couple of questions.

ERIC GEORGE: That's why we brought her here.

SEN. PRAGUE: I believe it. You know, you address some of the issues, such as mandates and the cost of medical malpractice, as some of the things that are driving up the cost of healthcare. I have to preface my remarks, I guess, with acknowledging the fact that the cost of healthcare is really abominable and driving many businesses out of business.

Would you suggest, or agree, that maybe the cost of prescription drugs with no control on what they can charge for their prescriptions is also a factor that's driving up the cost of healthcare.

BONNIE STEWART: I think regardless of what aspect of health technology you look at, whether it be MRIs, you know, MRIs are more expensive than x-ray machines used to be. The coverage that doctors often provide you now is more expensive than what that used to be.

Prescription drugs often times, because of the research and development costs associated with it, are not inexpensive. So medical technology as a whole, and in that I include all the issues surrounding prescription drugs. Yes, it does have an impact on healthcare.

SEN. PRAGUE: And research and development dollars, much of that comes from the federal government. But that's beside the point. There's no control, whatsoever, on the cost of prescription drugs, and that's one of the driving factors in the cost of providing health insurance to employees.

And the other issue is that the insurance companies, in my opinion, are not under control. When they file their rates, the very next day they can implement those rates. And to my knowledge, there's no hearings set like there is for Medicare supplements for rates on the cost of health insurance.

So what you mention in your testimony might be factors in the high cost of health insurance. But there are other driving forces that we also have to get under control. And until we get all of these issues under control, we're going to continue to face this problem of the driving cost of health insurance that is just out of control. I mean you sell health insurance. You sell it to just small employers?

SEN. PRAGUE: You don't sell it to big employers? Fifty or under?

BONNIE STEWART: Exactly.

ERIC GEORGE: Correct.

SEN. PRAGUE: So if a large employer wanted to get a health insurance package from you, from CBIA, they couldn't do that?

BONNIE STEWART: No, they couldn't.

SEN. PRAGUE: Well, that's something else to consider.

BONNIE STEWART: Can I comment? I agree with you that if we're going to get our hands around this, what we really need to do is address the issue of healthcare costs.

One of the things that's extremely important in assisting with that is a competitive market. Because market does make a big difference in terms of the prices that people charge.

They find a way to make something less expensive if people are looking around to find out where they can get the best buy. And health insurance is one of the things that goes on. We know that just from our own products.

But from our research, we know that there are a number of different products out there. But Price Waterhouse Cooper has done this study that's actually targeted, and identified, each of the different sectors of the healthcare cost and what they're worth.

For example, we know that the bulk of costs are associated with medical technology.

ERIC GEORGE: Medical advancements, correct.

BONNIE STEWART: So that affects costs, unless your willing to say to somebody that--

SEN. PRAGUE: You can't have it.

BONNIE STEWART: Exactly. Then the next group is the mandates.

ERIC GEORGE: Mandates amount for 15% of the overall healthcare costs.

BONNIE STEWART: So there's information out there for you to look at, and we shared this with members of the insurance committee as they look at the different proposals before them to try to address the whole issue of healthcare coverage.

But we encourage you to do that, because it's not only important for people who are looking at the potential to have access, it's important to those people who have it now.

The bulk of our members, I believe Eric mentioned to me earlier, 97% of CBIA's members according to this recent survey do provide healthcare coverage. But having said that, the number one issue on our membership survey this year with healthcare coverage. It's very expensive.

And in order for you to adjust that, again, it's not measured like this or increasing, adding to the number of mandates, which you know just by looking at your bill book, there are a million new mandates that have been proposed.

I exaggerated there a little, maybe not a million. There's a lot there this year. And each time you do that, you make it less likely that a young person who's healthy now is going to say, yeah, I'm willing to pay. Why not opt out until something goes wrong?

And when they opt out, you have the cost for the people who remain in the system go up. It's a vicious cycle. And unless somebody actually looks at those costs and addresses it, we're really never going to get to the heart of the problem and address the situation.

SEN. PRAGUE: Thank you very much.

BONNIE STEWART: Thank you.

ERIC GEORGE: Thank you.

SEN. PRAGUE: Dennis O'Neal and then Paul Filson.

UNIDENTIFIED SPEAKER: Dennis O'Neal?

SEN. PRAGUE: Here's Dennis O'Neal with the green tag.

DENNIS O'NEAL: I also want to wish you all a happy St. Patrick's Day.

SEN. PRAGUE: Same to you.

DENNIS O'NEAL: My name is Dennis O'Neal, for the record. I'm the Chief Lobbyist for Council four of the American Federation of State County and Municipal Employees here in the State of Connecticut.

We represent approximately 35,000 public employees, about equally divided between municipal and state employees here. I'm here today to lend out our support to Senate Bill 1147, AN ACT CONCERNING HEALTH CARE COVERAGE.

Our union has, for as long as I have been representing Council 4, supported universal single payer healthcare for all. We believe that healthcare is a universal need and should be a universal right for all, irrespective of income, irrespective of market forces.

That being said, until such time as we arrive at universal healthcare coverage, we strongly support this effort for large multibillion dollar corporations who come into the State of Connecticut demanding tax breaks, demanding all kinds of tax giveaways in order for them to come into Connecticut, who hold us hostage to stay in Connecticut, to then turn around, refuse to provide their own employees, to price their healthcare out of the range of their woefully paid employees, and for that to fall onto the shoulders of the taxpayers of the State of Connecticut is unacceptable.

That being said, I have just two other quick comments. One is, as I mentioned, that we do support universal healthcare, and toward that end, Council 4 as a participant with SEBAC, has proposed to the insurance company and the Insurance Committee earlier this year, and will again reiterate our support for opening up the state employee healthcare plan to small businesses and municipal employers throughout the State of Connecticut, so that small businesses and municipal employers can take advantage of the large pool the costs would be and savings would be dramatic for all involved.

And I'd also like to point out as my parting words that all of those here today, from what I can tell, who have opposed this Bill all have insurance coverage themselves and also oppose universal healthcare coverage, as I understand it.

So I would be delighted to answer any questions you might have with respect to this or any other matter. And thank you for your time.

SEN. PRAGUE: Any questions? No?

DENNIS O'NEAL: No other matter?

SEN. PRAGUE: Thank you.

DENNIS O'NEAL: Thank you for your time.

SEN. PRAGUE: You're welcome. Paul followed by Stacey Malitz and then Lori Pelletier.

PAUL FILSON: Stacey will be batting clean up. Good afternoon, Co-Chairs Senator Prague and Representative Ryan and distinguished Members of the Labor and Public Employees Committee. I appreciate the opportunity to testify today.

I'm Paul Filson. I'm the Director of the Service Employees International Union, Connecticut State Council. The State Council represents over 53,000 members in Connecticut.

We're Connecticut's largest union, and we represent healthcare workers, building service workers, public employees, community college professors, and staff, and we wholeheartedly support expanding access to affordable, secure, and quality healthcare in Connecticut through Senate Bill 1147.

It's been stated already there are a lot of people who don't have health insurance in Connecticut. Most of them are in working families. And at least 60,000 men, women and children would gain good health insurance if Senate Bill 1147 were passed into law. And SEIU is making healthcare security one of its top political priorities for this year.

Thousands of our members are being forced to choose between living wages and healthcare. And when we go up to negotiate contracts for our tens of thousands of members each year, the number one issue that we're faced with is how do we continue to get good, quality healthcare, and it's a big problem for the employers, also. And it's number one, probably, causer of strikes in this country is the cost of healthcare.

And we don't believe this is a choice that we should have to make, and I applaud the Labor Committee for proposing Senate Bill 1147. It recognizes that those who work for a living should not struggle with the indignity of having no health insurance.

And I'd like to point out what I think are some indisputable facts. First, many of Connecticut's most profitable corporations do not provide affordable, quality health insurance. And they include Wal-Mart, Laidlaw and McDonalds. Over 10,000 of these workers are enrolled in HUSKY.

Connecticut's HUSKY program and MEHIP programs are successful programs designed to insure the uninsured. HUSKY is meant for low-income residents.

Another fact is that uncompensated care costs more than preventative care, and costs for emergency room visits are passed on to the insured through higher rates and higher taxes.

So when CBIA and others say that this bill will not control costs, it will help to control costs by insuring more people and by lowering the burden on uncompensated care and the cost for that. Only 61% of employers provide insurance for their workers, and that number is going down, not going up.

Corporate business taxes add less than 4% to collected revenue for Connecticut's budget. This is down from over 11% fifteen years ago. So when corporations complain or whine about undue burdens that they're being faced with in something like this, they have been reaping the benefits of close to $2 billion in tax breaks over the last decade.

Many Connecticut small businesses pay more in Connecticut taxes than hugely profitable corporations. Connecticut allows corporations to avoid paying income taxes through a myriad of loopholes and exemptions.

And I might add that a corporation like Webster Bank pays less in taxes than many small businesses. In fact, they brag about it in their 10-K, that they don't have to pay any Connecticut taxes. It's unconsciousable.

Rising healthcare costs are out of control, making insurance less and less affordable. And drug prices are increasing even faster. Medical costs are causing over half of all personal bankruptcies.

Taking these facts into account, what should be done, and what would good public policy be? Clearly, the more people medically insured, the better, but who should pay?

Large profitable companies, like Wal-Mart, have the resources and obligation to pay for medical insurance for their workers. They should not be allowed to pass on these costs to taxpayers in the name of profits and jobs.

In fact, Wal-Mart's low-wage, bad-benefit model has been proven less successful than COSTCO's opposite policy. Though COSTCO sells goods for low prices and pays their workers living wages with good benefits, approximately $16 hour with health insurance and retirement plans, they earn more than $2,000 more per employee in profits than Sam's Club, Wal-Mart's version of COSTCO.

This argument that providing decent wages and benefits will cause Connecticut to lose jobs is not a given fact. In fact, leveling the playing field should have the opposite effect.

Providing incentive for other decent companies to open and compete with bottom-feeders like Wal-Mart, I've attached a Business Week article outlining the facts on this.

Senate Bill 1147 [Gap in testimony. Changing from tape 1B to 2A.]

--into the state-run health programs for low income will increase the pool of people insured in state programs, giving the state increased purchasing power. Again, helping to control costs.

The larger, of course, the pool, the more we can control costs. And, again, that's part of the competitive nature of it. We will encourage job growth by leveling the playing field.

It will save the state and taxpayers money by decreasing the amount of uncompensated care, and most importantly, Senate Bill 1147 will insure tens of thousands more people, improving their health and quality of life.

I thank you for your time. Sorry I went over the time limit.

SEN. PRAGUE: That's fine.

PAUL FILSON: If there are any questions? Oh, and I did want to add one thing about the temp agencies. Temp agencies can charge more and provide healthcare for their people who are employed in temp agencies. And the whole issue of temporary work in this country is a huge crisis.

More and more corporations are trying to avoid paying benefits by employing companies like temp agencies to do the work that should be done by themselves.

And Sam's Club, by the way, pays an average wage of about $11.50 an hour. And as you just heard from one of the temp agencies, they were only paying $7.80 an hour. So where's the difference there?

I mean the temp agency could charge, and the temp agencies charge a company, like Wal-Mart or Sam's Club or something like that, whatever the market will bear. Well, if the market bears, you know, $14 an hour, and they can provide health insurance, and they can do that.

And, again, Labor Ready is a notorious temp agency that provides strikebreakers during labor disputes and has helped to lower wage rates in the construction industry to such an extent that many people can barely make a living. So I did want to mention that. Sorry.

SEN. PRAGUE: Questions from Committee Members? I have a question I would like to ask you. If we keep the temp agencies in this bill, then they would provide health insurance for employees that like temporary workers wherever they place them for any length of time.

PAUL FILSON: Right. Some people work in temp agencies for six months. Some people work at temp agencies for two months. Some people work at temp agencies for two years, going from temp job to temp job. And this bill does provide for prorated, or we would propose that the bill provide for prorated eligibility for health insurance if they were working less than 25 hours a week.

But for instance, the temp agencies could charge more for their services, and provide health insurance for the people who work at the temp agencies. If this bill provides for, I think it's three months, I can't remember, but I believe it's three months, if they're at the temp agency for three months, then they should be covered by health insurance like any other corporation.

SEN. PRAGUE: So now I'm beginning to understand better how these temp agencies work. The people that they send out to work out in the real world are really their employees.

PAUL FILSON: That's correct.

SEN. PRAGUE: So that if they go to work for one place for three hours and another place for four hours, it doesn't really matter, because they really are the employees of that temp agency.

PAUL FILSON: That's correct. Some corporations use temp agencies to avoid unionization by employing lots of temporary workers for long periods of time. Especially during times of labor trouble, so that if there's ever a vote, the temp agency workers are excluded from the vote, so they can't vote for a union.

The temp agencies pay the unemployment compensation, they pay social security, the other things that they have to pay as an employer. They just don't want to pay health insurance. Well, this bill would say if they have more than 100 employees, they have to pay health insurance.

SEN. PRAGUE: Thank you for explaining that.

PAUL FILSON: Sure.

SEN. PRAGUE: Any other questions? Representative Ryan?

REP. RYAN: Yes, says that 65% of the employers of the state give health insurance. Bev Brakeman said 64%, and you're saying 61%. Is it really decreasing that fast as we're sitting here?

PAUL FILSON: As we're sitting here it's decreasing. But the truth is, I mean I think we're looking at different reports. And I mean I think I was looking at OLR report from 2004, but I believe there are different reports out there that have different numbers, and that's the nature of reports.

REP. RYAN: Thank you.

PAUL FILSON: But it is.

SEN. PRAGUE: Any other questions? Thank you very much.

PAUL FILSON: Thank you very much.

SEN. PRAGUE: Okay. Stacey?

STACEY MALITZ: Good afternoon, Senator Prague, Representative Ryan, and Members of the Labor Committee. I'd just like to start off saying I am here, although I am happy to testify on behalf of our members, instead of a bus driver, who it's very hard for us to get bus drivers here because they're working during this time.

My name is Stacey Malitz, and I'm the Organizing Director for the Service Employees International Union Local 760. I'm here in support of Senate Bill 1147, AN ACT CONCERNING HEALTH CARE COVERAGE.

There are about 5,000 school bus drivers in Connecticut, and virtually none of them have healthcare as a result of their employment.

SEIU is currently engaged in a nationwide campaign to improve the standard for school bus drivers, which includes securing affordable healthcare.

In a recent study by the Connecticut Health Policy Project, over 700 employees that work for the two largest bus companies in Connecticut, Laidlaw and First Student, are receiving state assistance for their healthcare for themselves or their children.

When we speak to our members, affordable and assessable healthcare is consistently their number one concern. However, at the bargaining table, Laidlaw and First Student make it clear that bus drivers do not deserve healthcare. We say this is wrong.

Laidlaw and First Student are multi-national corporations making millions each year and profits here in Connecticut. At the same time, they are costing the state over $3 million per year to provide HUSKY benefits. We feel the least they can do is to help defray the costs of providing affordable healthcare to their employees.

This Bill is the first step in helping thousands of employees that have an important job in transporting our children, obtain what is fair and reasonable expectation from their employers. Thank you.

SEN. PRAGUE: Questions from Committee Members? I just want to ask you one question, Stacey. The schools that these buses serve have nothing to say about the contracts that they develop with the bus companies about what the bus companies offer their drivers?

STACEY MALITZ: For the most part, no. Whenever we have issues, and we go to the School Board, they will pretty much say that they don't work for the School District, they work for the company, and that's your issue with the company.

And I just wanted to point out where, I think somebody said it earlier, I think it was Mr. Moore, about that there are some companies that provide healthcare.

For instance, Laidlaw and First Student does provide healthcare. It's just completely unaffordable to somebody who's making $13 an hour. Which is considered a part-timer for bus drivers, too. Most of them are not full-timers.

SEN. PRAGUE: Thank you.

STACEY MALITZ: Thanks.

SEN. PRAGUE: The next speaker's Lori Pelletier. Is Lori here? And after Lori is Amy Briggs.

LORI PELLETIER: Good afternoon, Senator Prague and Members of the Labor and Public Employees Committee. I'm Lori Pelletier. I serve as Secretary-Treasurer of the Connecticut AFL-CIO. I am here on behalf of 211,000 working men and women across this state from all 169 towns in this state.

We support Senate Bill 1147, and you have my written testimony, and many of the speakers who have been proponents of this legislation have covered my testimony. So I just want to refute some of the comments that have been made by some earlier speakers.

A couple of things, and Representative Belden asked the question about the minimum wage moving to $8 an hour. It seems to me that if everybody had a minimum wage of $8, that just raises the playing field for everyone.

It doesn't disadvantage anybody over anybody else, because the bottom of the floor is $8, so I don't see that that would be a problem. Even in the temp agency, I mean, these are people that work very hard. All work is honorable. It's when we get to the pay and benefits that some of the dishonor comes in.

If we go back six or seven years, before Wal-Mart, who has made a terrible impression on this state as far as insurance and wages, if we go back, and you get this same type of list of what companies are on HUSKY, I'll bet that the list looks incredibly different. I bet it is smaller employers. I bet it isn't these mega companies that are on this list today. And it's because Wal-Mart is driving business down.

If we think back, you know, when I first moved to Connecticut in 1984, moving into Middletown, you had a vibrant downtown Middletown. You had Sears on Main Street, you had Tabatchnicks and Cables, you had Bob's Surplus, it's now Bob's Stores, and that changed into the Caldors and the Bradleys and the Aims. They're all gone. And the reason why they're gone is because of Wal-Mart.

Wal-Mart has come into industries, good afternoon, Representative Ryan, has come in and just driven this business out. Including Target, which is also a mega company. And it was just a year ago that Target notified their 800,000 employees, sorry. On Monday we're not going to cover healthcare insurance because in order to compete with Wal-Mart, we cannot. That's shameful.

Denny O'Neal from the Council 4 earlier talked about helping out small employers with the SEBAC offer, opening up health insurance. And certainly hope that the Connecticut business insurance agent that was here earlier would talk about the fact that they should be supportive of that. Because if 90% of their clients are 50 or less, then why wouldn't they want to push them onto something that can save them 50% in their healthcare plan.

The Connecticut AFL-CIO, along with all the other Unions, have also been working to try to create a non-profit mutual insurance fund for workers comp, and I know we're going to have the hearing next week. Again, that's another issue of making business more business friendly here in the state.

You know the idea that it's bad public policy to cover people is shocking to me. In the richest state in the richest nation in the world, that's a shocking statement. And certainly cost drivers of medical mal and flexible designs are all nice window dressing, but, quite honestly, all it's going to do is create more profits and put more people dependent on emergency rooms.

Some time ago, someone said that a rising tide lifts all boats. But what's happening today is that the plug is being pulled out, and everybody is falling to the bottom.

And I'll go to the example of United Technologies, that in the first quarter had announced their profits for 2004 at $9 billion in profit. While at the same time, the Machinist Union, and other unions that work for United Technologies are trying to negotiate contracts where their co-pays for MRIs and x-rays are in excess of $200.

When I fell last year and hurt my knee, if I had been on the UTC plan, just to go to the emergency room, have an MRI of my knee, and to get a little physical therapy, would have cost me, out of my pocket on their plan, $1,800. This is a company that made $9 billion in profits.

Again, we need to look at the fact of what we want our state to look like and opening the door and making that these mega employers of 100 or more provide health insurance is the minimum that we should do.

So again, I applaud the Committee on their efforts to try to bring this to light. And if you have any questions left, I'd be glad to answer them.

SEN. PRAGUE: Any questions [inaudible - microphone not on]

REP. HETHERINGTON: Thank you. Healthcare generally, when it's offered as a benefit by employers, is elective. You have an enrollment period. If you don't sign up during the enrollment period, you wait until the next enrollment period. Under the healthcare provided, under Senate Bill 1147, would you like to see that elective with respect to the covered employees?

LORI PELLETIER: No. Because I think the problem with elective is that it can be used against you. That maybe there's some pressure that's put on you by your employer to say, gee, we'd like to be able to keep you here, but, boy, you're going to select that healthcare, so that would be a little costly.

We might have to lay somebody off. I'm not for elective on that. I think that there's a responsibility. We don't allow them to elect to not be paid or not. We've done away with slavery. Although, at times I'm concerned we're trying to think on bringing it back. But we should not allow it to be elective.

REP. HETHERINGTON: So this form of healthcare coverage would be different from healthcare coverage offered to other employees, which is, in fact, elective?

LORI PELLETIER: Yeah. This is for that we should be sure that people are getting healthcare coverage. Because you and I end up paying if they're not.

REP. HETHERINGTON: But you and I have elective coverage. But what I'm saying is this is not elective.

LORI PELLETIER: I don't have elective coverage in my office. Everyone in my office is required to have health insurance.

REP. HETHERINGTON: You don't elect into the plan?

LORI PELLETIER: No.

REP. HETHERINGTON: Okay. Thank you.

LORI PELLETIER: I'm a tough employer.

SEN. PRAGUE: Should have more tough employers.

LORI PELLETIER: Thank you, Senator.

SEN. PRAGUE: Our next speaker is Amy Briggs followed by Janice Williams.

AMY BRIGGS: Good afternoon. Thank you, Members of the Labor Committee, for raising this bill. My name is Amy Briggs. I'm a prime example of why you should pass this bill.

I work at Wal-Mart, and I'm a full-time employee. I'm a single mom, and my son, Ted, is on HUSKY. Ted's 18 years old, and he also works, but he doesn't get healthcare because he can't afford it.

At the end of July, Ted turns 19 and will no longer qualify for the HUSKY. In order to keep him insured, I will have to put him on my plan at Wal-Mart.

Now I know you've heard a lot about what's going on in the papers about Wal-Mart's healthcare and how bad it is. Well, I wanted to be one of the ones to tell you straight out.

I make $8.69 an hour after working full time for six months and part time for another three months before that. So I just enrolled in the HMO. I just became qualified to do so.

It costs me $88.63 every two weeks for just myself, no dependents. That's 15% of my gross pay. If I have to add my son on, it will jump to $146 every two weeks. That's 25% of my gross pay.

Maybe if I earned $75,000 or $100,000 per year I could afford it, but at $8.69 an hour, it doesn't work.

I could understand if I worked for a tiny mom and pop store or a little family business. But this is Wal-Mart, the biggest company in the world. Our CEO earns $8,700 an hour, not counting stock options. He has earned more than I make all year in just the time I've been sitting in this room waiting to testify.

This proposed legislation will help people like me. If this legislation passes, I could afford healthcare for my son and myself. And the money I've saved I could spend on other things that would help our economy.

There are thousands of other Wal-Mart workers in the state that would benefit from this. Please support the bill. Any questions?

SEN. PRAGUE: Any questions from Committee Members? I want to thank you [inaudible - microphone not on.]

AMY BRIGGS: Thank you.

SEN. PRAGUE: Did the union ever try to get into Wal-Mart?

AMY BRIGGS: I believe that was in the papers from Canada.

SEN. PRAGUE: Oh, up in Canada. We know about that. But I mean your Wal-Mart.

AMY BRIGGS: Yes, it has tried. Unsuccessfully, but yes.

SEN. PRAGUE: I have heard [inaudible - microphone not on]

AMY BRIGGS: Yes. That's also a rumor.

SEN. PRAGUE: [inaudible - microphone not on]

AMY BRIGGS: That's why I'm here.

SEN. PRAGUE: Thank you. Representative Ryan?

REP. RYAN: When you say you work full time, is that a full 40 hours a week?

AMY BRIGGS: No, 34 is considered full time.

REP. RYAN: Okay. I'm just trying to do the math on your calculations. So you're working 34 hours, so when you say $8.69, it's not times 40, it's times 36. That's your pay.

AMY BRIGGS: Thirty-four. Yes.

REP. RYAN: Thirty-four, excuse me.

AMY BRIGGS: Yes. There are times when I do work 40 or 42 hours a week. But they're few and far between.

REP. RYAN: Thank you.

SEN. PRAGUE: Representative Zalaski?

REP. ZALASKI: Thank you, Madam Chair. When you decided to come here, were you worried about your employment and whether your employment might be jeopardized by coming here today?

AMY BRIGGS: Yes, I am. I did. That's why it's taken me so long to get the courage up, and I'm nervous about it right now. But I'm here.

REP. ZALASKI: Well, we want you to know that you have the support of us, I think the whole Committee. We would hope that doesn't happen, and if anything like that does happen, I would imagine we'll be down store personally. Or I know I will.

AMY BRIGGS: Thank you. I'll remember that and give you a holler if it should. It's nice to know where your friends are. Anything else?

SEN. PRAGUE: Anything else? Thank you, again.

AMY BRIGGS: You're welcome.

SEN. PRAGUE: Janice Williams followed by John Green.

JANICE WILLIAMS: Good afternoon. I'd like to thank you for allowing me to give my testimony today. My name is Janice Williams. I reside in Hartford. I work for Stop & Shop. I'm on the Executive Board of UCFW Local 371. I am here today to support Senate Bill 1147.

I was involved with Local 371 and Stop & Shop last year doing our negotiation for our contract. The biggest issue at our contract negotiation was heath insurance and being in the competitive field with Wal-Mart.

Stop & Shop presented to us a big map strategically showing us stores that were going to be opening that would be in competition with us. Our compromise for our negotiation was allowing part-timers to only be eligible for insurance after two years.

This was a compromise that we had to give, and in the 26 years that I have been employed by Stop & Shop, I have never had a payroll deduction taken out of my paycheck for health insurance.

And allowing this compromise with part-timers, they will have to, if they become ill, go on the HUSKY program. And this was an issue that we were forced into because of the Wal-Marts of today.

I would also like to ask the Senate to, unless we're given a level playing field for health insurance for our company, I urge this Committee to level the playing field for healthcare benefits and stop relying on tax dollars given to companies like Wal-Mart, and they give us an unfair competitive advantage over responsible employees, like Stop & Shop, that apply adequate insurance benefits to us as well as wage benefits.

Thank you for allowing me to give this testimony today. Any questions?

SEN. PRAGUE: [inaudible - microphone not on] scenario of what's happening to our standard of living, that there is this rush to the bottom. Our whole standard of living is being affected by companies like Wal-Mart that exploit their workers. Okay. Thank you very much for coming in.

JANICE WILLIAMS: Thank you.

SEN. PRAGUE: John Green followed by Robert Taylor.

JOHN GREEN: Thank you, Senator Prague, Representative Ryan, and Members of the Committee. My name is John Green. I'm the Director for the Connecticut Working Families Party.

I want to thank the Committee for raising this bill and taking a minute to hear my testimony. It's sort of at that point in the day where it seems like pretty much everything has been said. It's just that not everyone has said it. So I'll try to keep my remarks pretty brief.

And what I'd really like to do is just respond a little bit to some of the remarks that have already been made, particularly the previous speaker, Janice Williams, who I've known and worked with on some other issues in Hartford. And I think she makes an extremely important point that I worry hasn't gotten enough attention in the deliberations over this bill.

And that is, you know, we hear folks from CBIA or temp agencies that say, well, you know, businesses are against this. The reality is, as we were told, over 90% of CBIA's members aren't negatively impacted by this Bill at all.

And, in fact, they're probably positively impacted. Because what's happening is just that there's a universal group of businesses that benefit from certain policies or hurt by other policies.

But businesses are competing against one another, and in a variety of industries in our state and around the country, we have very intense competition between retailers competing for market share, industrial laundries, hotels, buildings trades employers, and when they're competing, it's important that they have a level playing field.

In the labor movement, we've supported things like minimum wage, because we thought it was important to do what's called taking wages out of competition.

In other words, employers are free to compete, and competition is the engine of ingenuity that drives our economy, but that competition shouldn't come at the expense of workers. That they can compete on all kinds of other things, but they can't compete on who can pay their workers the lowest.

And the same principal should apply to healthcare. We should take healthcare out of the competitive race to the bottom, because of exactly what Janice just described. That her employer that wants to be responsible and wants to provide and pay for health coverage, it's the biggest rising cost in their business is healthcare.

Wal-Mart doesn't pay that cost very much, because the state pays for them. We are using our tax dollars to provide an unfair competitive advantage to the Wal-Marts of the world. And the same thing applies in the construction trades.

When two firms are submitting bids, they're trying to get the lowest bid, and how is a bidder that's providing health insurance supposed to compete with a competitor that doesn't provide insurance, when that is, in fact, as we know, the largest growing cost.

So this is not just about businesses for it or businesses against it or workers for it. This is about responsible businesses that are getting run out of business. And Senator Prague, you said something earlier, which is that healthcare costs are driving companies out of business.

I would just say that it's not quite that. It's that irresponsible employers, that don't pay healthcare, are driving responsible employers out of business. It's not the healthcare cost alone that is driving folks out of business.

It's the competition with folks who don't pay healthcare. And that is what is driving the Aims and the Kmarts out of business.

Lastly, I just want to take a minute to continue to respond on the question of temp agencies. I was kind of surprised to see temp agencies here to testify. I'll be really quick.

Companies use temp agencies for staffing specifically to avoid paying healthcare costs. That's why people turn to temp agencies, many of the cases.

And those companies pay the temp agency an hourly rate per worker that is not only substantially more than what the agency pays that worker, but is oftentimes more than what the firm using the agency pays to their own full-time employees. Because they're paying more in wages so they don't have to pay for healthcare.

And if this bill were to pass, the obvious ramification would be that those temp agencies, that are in fact the employers, would pay for healthcare for those workers. They would pass that cost on, to some degree, to the agencies, to the firms that are using those temp agencies.

And those firms might then say, you know, if it's a business that employs temp agencies, well, if we're paying an added rate for the labor, because we're not paying the healthcare cost that this temp agency is providing to the worker, we might as well just employ the folks ourselves, and so we won't use the temp agency.

So to imagine that temporarily employed workers will lose their jobs is a hallucination. Those workers will just get hired by the company. And that would be a good thing. The only folks that would lose the jobs are the folks who work full time as managers at the temp agency.

SEN. PRAGUE: Do Committee Members have questions? Thank you.

REP. RYAN: Talking about that, we did get some written testimony from Kmart.

JOHN GREEN: Wal-Mart.

SEN. PRAGUE: Wal-Mart.

JOHN GREEN: Yeah, I was going to add one other comment on that, but go ahead Representative Ryan.

REP. RYAN: Okay. How do you know if I don't have Kmart up here? No. Wal-mart. And they say that over 80% of their full-time associates are eligible for coverage, and it only costs $40 a month for an individual and $155 a month for family, regardless of the number of children. From your experience, do you think that's accurate?

SEN. PRAGUE: They don't tell you the benefits.

JOHN GREEN: Well, they provide, interestingly enough, they'd be counting on folks, I'm surprised they submitted this, but if you go to the back of their testimony, they provide what they say are their rates.

Interestingly enough, based on the rates that Amy showed us, their rates have gone up in terms of the portion of the premium that's picked up by the workers. The benefit that they would be talking about that's less than $40 a month carries an annual deductible of $1000. And it only allows them to use network physicians and providers in the network.

If you look at, for example, my employer, I work at a tiny non-profit organization with a budget of just over $100 thousand a year with three employees, I pay a $500 deductible for my health insurance, and I don't pay anything at all, no one on our staff, pays anything towards the premium.

The $500 deductible at Wal-Mart for the associate only carries a monthly charge of $66.26. I'm sorry, for using any doctor, $74.96. The family benefit, and this is just according to their testimony, for family coverage with a $500 deductible, using any doctor, the cost would be $263.97, which comes out to $3167.64 a year.

And if you were working about at the rate and hours that Amy's working, you'd earn a little under $18 thousand a year, you'd be paying about 18% to 19% of your gross pay towards your own healthcare plan. I consider that to be astronomically out of whack with the norm and presumably with the standard that this Bill would establish.

REP. RYAN: Thank you. We just got the testimony, and I hadn't flipped all the way to the back to see that chart. Thank you for pointing that out.

JOHN GREEN: Thanks for asking.

SEN. PRAGUE: Next speaker, Robert Taylor followed by Sharon Patterson-Stallings.

ROBERT TAYLOR: Good afternoon.

SEN. PRAGUE: Good afternoon.

ROBERT TAYLOR: And I'd like to say thank you for allowing me to speak.

SEN. PRAGUE: It's our pleasure, Robert.

ROBERT TAYLOR: Now I am a member of ACORN, and it would also be my position as that this Committee should accept this bill for the simple fact a person with 100 employees or more are right. It's called, as Butch would say, big businesses are the backbone of this country. I pay taxes, they pay taxes.

SEN. PRAGUE: What's ACORN?

ROBERT TAYLOR: If they get sick or something, all right? This company is making money off of them. They should contribute something to them. If they get sick or something, they should have something to help them with, because the way it is now, they are not. And I've talked to a lot of them.

I know like my daughter and her husband, they have very great problems, because put it like this. They work for Wal-Mart. They've been there like 15 years. All right? But they're under such a strain, it's hard for them to miss days if they're sick. They're scared to not go to work. There are a lot of people out there that are struggling.

This bill would help a lot of people, and a lot of people that pay taxes. And we at ACORN urge this Committee, this Body, to support this bill wholeheartedly, because when you come right down to it, it's not the company or building, it's not the corporation or the CEO, it's the people.

And what we have to do, and what this Committee has to say, that we have to care about people. And I thank you very much.

SEN. PRAGUE: Thanks, Robert. Thank you very much for coming. The next and last speaker is Sharon Patterson-Stallings.

SHARON PATTERSON-STALLINGS: Good afternoon.

SEN. PRAGUE: Good afternoon.

SHARON PATTERSON-STALLINGS: My voice comes and goes. Weather, sign of change, I'm just having a little problems. My name is Sharon Patterson-Stallings. I'm also a member of ACORN. And I'm here to talk to you and ask you to support this bill on behalf of the unemployed.

You've heard about those that are unemployed with companies. They have to go between health insurance and whether they should have it or not. I'm thinking about, if we don't support this Bill, the cost of the uninsured is far more than those that are insured.

The uninsured wait a long time when they're ill to go to a doctor. And they choose the emergency room as their primary physician, which costs our taxpayers a lot more, because they can't pay their bills.

I have a relative that lost their job and became very seriously ill, and had to go to the emergency room. They were hospitalized, and they can't pay that hospital bill. A bill has been turned over to the collection agency, and that collection agency calls them daily asking for payment, asking for a payment arrangement. At this time, they're still unemployed and ill. So what are they to do?

By supporting this bill, Senate Bill 1147, I think it gives everyone a chance to be insured. Thank you.

SEN. PRAGUE: Thank you, Sharon. Sharon, what's ACORN?

SHARON PATTERSON-STALLINGS: I know it's American Community Organizations United. Right. We work in the community. We're low and moderate income individuals, and we volunteer, and we're organizing in our communities to help others.

SEN. PRAGUE: Thank you very much.

SHARON PATTERSON-STALLINGS: You're welcome.

SEN. PRAGUE: Let's bring the first segment of our hearing to a close. We won't have time to hear from the panel members, unfortunately. Unless you want to come up briefly and comment on some of the thing that have been said. We have like four minutes.

BEVERLEY BRAKEMAN: We'll make this really quick. One of the questions I think that came up was why the MEHIP plan or the state being the benchmark was too high, and really, we're using that as a benchmark for this initiative, because we think people should have the same insurance that state employees have.

The state plan doesn't cost any more than it does on the private market. And low-wage workers need to have quality insurance, because they, especially low-wage part-time workers, can't afford to fill the holes in insurance that's not adequate or that's not good insurance. So that was one of the issues.

The other question, I think, that Representative Hetherington had was regarding this being elective. And we would support or propose that within companies that are eligible for this program, the employees that are covered out of their spouse, or some other way, would be able to opt out of this.

The issue of franchises is something that I do think is a very legitimate question that we have to do more research on. Sonya can talk a little bit about how they did that in California. They talked about enterprises and employee units.

And I would just reiterate what John Green said, which is that this Bill is really designed to help small businesses by leveling the playing field and making large corporations pay their fair share.

SONYA SCHWARTZ: Some questions were also raised about whether or not temp agencies would be on the hook under an act like this that asks employers with 100 or more workers provide coverage.

And I just wanted to based on the Bill that's filed now, under Section 1, Part 3, in the definition of enrollee, it talks about people who have worked at least 100 hours a month, so that's about 25 hours per week, and who have also worked for that employer for three months.

So if a worker at a temp agency was only working for the temp agency for a month, then no. But if more than three months, then yes. So that's how it stands now. You know, that could be changed. I just wanted to cover that. I want Ellen to address some of the cost issues raised.

ELLEN ANDREWS: Just real quickly, healthcare cost drivers were brought up, and one of the things that's appealing about this bill is that it gives a very cost-effective alternative for businesses to buy into HUSKY, which is an exceptionally great deal, as we talked about before. So I think in some ways this Bill would help reduce costs.

Also, when you talk about cost drivers, I'm sure you'll be shocked to hear that economists disagree, and we might have a different perspective than Price Waterhouse Coopers that I would submit one of the major cost drivers is the uninsured and the fact that people can't get coverage until they let problems, they don't get preventive care, they don't get early screening, they don't get early treatment, they end up accessing care in expensive late in their treatment, and it's more expensive to cover them, and it adds incredible inefficiencies when one in ten people in Connecticut doesn't have coverage. That's a huge driver of costs.

The other drivers of costs are things like hospital costs, which are affected by workforce shortages, drug costs, HMO profits, those are all huge things that will not be affected by any mandate revision. I haven't heard of anybody talking about taking drugs or hospital costs or HMO profits out of insurance to roll back mandates.

And, also, medical technology. While it's true that's it's costly now, it's an incredible investment, and most economists, when you look long term, realize that those things are advances in our ability to provide health to people, and they're part of more detecting diseases earlier and keeping people healthy, which, yes, you may pay a little more up front, but you save a lot down the road.

SEN. PRAGUE: I want to thank the three of you [inaudible - microphone not on.]

ELLEN ANDREWS: Yeah, most of it is, yeah.

SEN. PRAGUE: [inaudible - microphone not on.]

ELLEN ANDREWS: It will for people who are eligible. This is a longer conversation, but for people who are eligible for HUSKY, yes. Otherwise, no. Unless we write a waiver, which is a longer conversation.

SEN. PRAGUE: Thank you.

ELLEN ANDREWS: Thank you.

SEN. PRAGUE: Senator Looney is here. In fact, he bypassed the opportunity to testify [inaudible - microphone not on]

SEN. LOONEY: Here, Madam Chair.

SEN. PRAGUE: Thank you for coming.

SEN. LOONEY: Thank you, Madam Chair. I'll be brief. Thank you, Madam Chair. Good afternoon, Senator Prague and Representative Ryan and Members of the Labor and Public Employees Committee. I'm Martin Looney, Senate Majority Leader. I represent the 11^th District in the City of New Haven in the town of Hamden and here today to testify in support of Senate Bill 1147, AN ACT CONCERNING HEALTHCARE COVERAGE.

This is the health security act. The majority of Connecticut residents, about 65%, receive health insurance through their employers. However, in recent years, in a disturbing trend, a growing number of employers, including very often large and profitable employers, are becoming less likely to provide health insurance for their employees.

In fact, 66% of the uninsured are employed, and these workers have a significant number of dependants. According to the Office of Healthcare Access, employer-sponsored health insurance decreased from 66% to 64% in 2004, and this decline was largely offset by increased HUSKY program enrollment so that the percentage of workers with insurance actually changed very little.

In effect, then, certain employers are using HUSKY health coverage as a subsidy and requiring taxpayers to pick up the tab for benefits that a financially health employer should rightfully finance.

This corporate policy is directed at low-income employees, those who qualify for HUSKY. This cost shift amounts to a hidden corporate welfare program for corporations who treat their low-income employees poorly.

Now I believe that all citizens do have the right to health insurance, and I would support a program of universal healthcare. However, I do not believe that in our current system, health corporations should deflect the cost of health insurance for their employees onto the state in a so-called Wal-Martization of benefit standards, leading to a race toward the bottom.

The Legislation before you, in Senate Bill 1147, would offer employers with 100 or more employees the choice to either provide an employment-based medical plan that meets certain criteria or participate in a state operated medical program for which the corporation would be charged a fee.

This system would preserve equity for those employers who currently provide medical coverage for their employees. The “pay or play” system is designed so that employers who currently provide medical coverage for their employees would not be better off abandoning that coverage in favor of the government program. Employees would only be required to pay up to 10% of their annual family income for [Gap in testimony. Changing from Tape 2A to Tape 2B.]

--or temporary employees to avoid participation in the program.

I believe that this Legislation would constitute a meaningful step toward corporate responsibility to this area and support of workers rights to quality healthcare, and I urge the Committee to pass the Bill.

Thank you, Madam Chair, Mr. Chair.

SEN. PRAGUE: Thank you, Senator Looney. We certainly appreciate you coming and lending your support to this Bill. Any comments or questions from Committee Members? Representative Cafero?

REP. CAFERO: Thank you, Madam Chair. And thank you, Senator Looney, for testifying this afternoon. Senator Looney, you indicated before that you were in favor of universal healthcare, and I know that means a lot of things to a lot of people. What is your version of what you would support with regard to universal healthcare?

SEN. LOONEY: Well, I think, ultimately, going back to the debate that's been going on nationally over 10 years is that a system that at some point provides coverage that is not necessarily connected always to employment would be best, and some variant on the single-payer system, as has been discussed nationally, would be, perhaps, in an ideal world the best situation. But we are, of course, a long way from that yet in terms of what is likely to be adopted or approved.

REP. CAFERO: And the cost of that single-payer system, how would that be paid?

SEN. LOONEY: Well, it would have to be paid partly through taxes, partly through other mechanisms, assessments on employers, both individual and businesses.

REP. CAFERO: Okay. Secondly, you mentioned, what I would agree with you, could amount to corporate welfare where in large corporations, especially with their low-income employees, aren't offering healthcare, because they feel, Hey, why should we do it, the state is offering it through, certainly, the HUSKY Plan?

Do you know of any instances wherein an employer is offering a health insurance policy, and the employee is opting not to avail themselves of it, because they feel that the HUSKY Plan, in my example, is a better Plan than what is being offered by the employer?

SEN. LOONEY: No, I do not. I would imagine that there might be some circumstances where that has happened. I don't know of a number or percentage of cases. I think that the creation of the HUSKY adult program, I think the policy behind it initially was to provide coverage for those people who are working for small or marginal employers who are, perhaps, barely scraping by themselves.

I don't think the program envisioned, in effect, displacing costs from employers with a significant amount of resources onto the state. I think the mindset at the time was to, since so many jobs are being created in small businesses in particular, that may not have the resources to provide coverage, that HUSKY adult was, I think, intended for that niche, rather than for, in effect, a windfall for those who do have the resources.

REP. CAFERO: I would agree with you. Would you also agree with the fact that, however, it also, when we did create the program, that it wasn't intended for employees who are already offered healthcare, as a second option to choose in lieu of their employers health benefits?

SEN. LOONEY: Well, I think that was probably also intended. That as long as employers were providing a benefit that met certain standards, that should be what the employees avail themselves of, I think. I don't think we necessarily intended shopping for coverage.

However, in some cases, if the employer's plan was so minimal, then, perhaps, it would justify an alternate choice. But if an employer made a good-faith effort to offer a decent plan, I think the intent was that employees would opt for coverage within that plan.

REP. CAFERO: Senator, lastly, do you foresee a way that we could, in addressing that very issue, that we could somehow define or qualify what that good, decent, good-faith effort on the part of an employer is, and then say that if, in fact, an employer does make a good, decent, good-faith effort to provide health insurance to their employees, then the employee would be prohibited from availing themselves of the HUSKY program so long as they had that program available to them?

SEN. LOONEY: Well, I think that obviously would be something worth exploring, especially if we were able to come to a consensus definition about what a reasonable employer-offered plan would be.

REP. CAFERO: Thank you, Senator.

SEN. LOONEY: Thank you, Representative Cafero.

SEN. PRAGUE: Are there any questions from Committee Members? If not, I want to thank you again for coming. [inaudible - microphone not on]

SEN. LOONEY: Thank you, Madam Chair. Thank you, Mr. Chair, Members of the Committee.

SEN. PRAGUE: And with that, we'll call this session of the hearing closed [inaudible - microphone not on]

[Whereupon, the hearing was adjourned.]