AN ACT CONCERNING A FAIR SHARE HEALTH CARE SURCHARGE.

File No.:
Bill No.:	SB-462
PH Date:	3/9/2006
Action/Date:	JFS 3/14/2006
Reference Change:

There are thousands of employees in Connecticut who work for large corporations and are on HUSKY because they are paid so little and have either unaffordable or no health insurance. This situation costs the state millions of dollars annually.

As of January 1, 2007, this bill makes all private retail employers in the state with more than 5,000 employees subject to a fair share health care surcharge. Covered employers must pay the labor commissioner a surcharge of $2.50 for each employee hour worked per year to a maximum of 40 hours a week (for a full time employee the fee would be $5,200 annually). Covered employers providing health benefits to its employees or making payments to employees in lieu of health benefits the employee declines will receive a credit against the surcharge. The amount of the credit will be the employer's cost to provide "medical care" as defined in the Internal Revenue Code.

Each covered employer must pay the surcharge, after reductions for any credit, not later than 30 days after the end of the calendar year, or the end of any other period determined by the labor commissioner. Money from the surcharge will be placed in a separate nonlapsing account in the General Fund called the “fair share health care account.” The money must be used to defray the costs of the state in providing health care coverage under the HUSKY Plans to employees of covered employers. Any funds in excess of those needed for that purpose must be used to defray additional state expenses for covering uninsured or underinsured patients.

Any covered employer that fails to pay the surcharge will be liable for interest on such amount at the rate of 1 ¼% per month or fraction thereof from the date when the surcharge was due.

Any new employer or existing employer not previously covered under the bill that becomes a “covered employer” must begin complying with the bill's provisions within one month. Employers who cease being “covered employers” must notify the labor commissioner within 15 days of its change of status.

The bill also requires covered employers to keep, for three years, a record of the health insurance benefits provided by the employer. The bill authorizes the labor commissioner to adopt regulations to carry out its provisions.

Amendment "A" inserted a definition of "retailer" that matched the NAICS definitions.

Natasha Pierre, Permanent Commission on the Status Women, supports this bill. Retail is an industry dominated by females and underpaid individuals. Many individuals that are employed seek assistance from state government programs in order to provide health care for themselves and their families. This bill would provide an affordable strategy for the biggest proportion of uninsured women who need health insurance.

Sal Lucianco, Executive Director, AFSCME Council 4, supports this bill. In the last five years the percentage of employees covered by medical insurance has dropped. By not insuring employees is bad public policy. We already have a wasteful health care system in this state. It is called the emergency room. It is as expensive a form of medical delivery as it is crisis dependent. I support fair share because it is moral and good public policy. The largest and wealthiest businesses in the world should not siphon taxpayers' dollars to subsidize their employees.

Roch J. Girad, Connecticut Federation of School Administrators, supports this bill. It is time for big businesses to take responsibility for paying for their fair share of health benefits for their employees and stop shifting their bill onto small employers and the taxpayers. To make Connecticut a business friendly place, does it mean that we have to subsidize these multi-billion dollar companies to stay in CT?

Lori Pelletier, Connecticut AFL-CIO, supports this bill. This concept should be recognized as a fair and equitable “first step” in dealing with the growing health care crisis in Connecticut. It is a good policy. Without this legislation, workers, taxpayers, and other businesses are forced to pick up a $113 billion tab for health care when large, profitable companies don't pay their fair share of health care cost for their workers. In the olden days, companies, especially profitable companies, had the moral obligation to their workers to provide health coverage for families. It was the companies' way of recognizing the valuable part workers play in the success of those companies. The greed and heartlessness permeating today's businesses are driving an ever increasing assault on wages and benefits of the middle class.

Daniel Livingston, Livingston, Adler, Pulda, Meikejohn & Kelly, supports this bill. As you are aware, huge ultra-profitable companies like Wal-Mart drive down wages and refuse to provide affordable benefits so that many of their workers have no insurance at all. They pay employees so poorly that they are forced to be eligible for healthcare through the state at taxpayers' expense. Wal-Mart not only hurts its employees and their families, it forces competitors to cut benefits in order to compete, and it forces responsible employers out of business. By leaving many workers uninsured it raises the cost of healthcare for the rest of us. It takes $5 million every year from the taxpayers through Husky.

Brian Petronella, President of the United Food and Commercial Workers Union Local 371, supports this bill. Most employers in Connecticut are responsible and do provide insurance for their workers. The health care system is broken. Wal-Mart, as the largest employer in the country, is driving retailers' race to the bottom. Wal-Mart is setting a low standard of living, wages and benefits. We will always have retail and since retail is becoming the largest sector of the economy, it is important to make sure these jobs can support a family. It is the responsibility of our elected officials to ensure that large retailers with staggering profits do not continue to line their pockets while taxpayers foot the bill for healthcare for their employees.

Stephen Karp, Executive Director, National Association of Social Workers, Connecticut Chapter, supports this bill. Last year, taxpayers paid $5.4 million for Wal-Mart workers and their families to be on HUSKY. The money could have gone to more needed programs for the elderly or mental heath programs. Mega-retailers such as Wal-Mart must not be allowed to take advantage of Connecticut's taxpayers by dodging their corporate responsibility to pay a fair share of employees health care cost. Profiting from the state's residents while shifting the costs of employees' health care is unacceptable. We need a system of universal health care that assures every resident the right to health care.

Laurie Santos, PAC, MSW, supports this bill. Over the years, Ms. Santos has worked in the emergency rooms and clinics. She has treated many citizens on state aid through the HUSKY program, most of them working. Many workers rely on the state insurance due to poor health plans through their employers. The state is subsidizing the health care expenses for companies who already rely on tax-breaks from the state. It is time to act and have companies pay their fair share. Healthy parents lose less work days and healthy children do better in school.

Laurie Julian, GrowJobsCT Health care Initiative, supports this bill. Through labor negotiations, unions have fought for health care benefits for its members and set the standard for the industry. The ongoing strike over health care benefits between Sikorsky and the Teamsters dramatically demonstrates the commitment and need for affordable health care benefits. Our employment-based health system is the most common way to get health insurance, but it is in decline. This bill will prevent large companies with high profits from dishonoring their responsibility and shifting onto taxpayers the cost of insuring their workers. With profits of $10 billion, Wal-Mart tops the list in over 21 states of burdening taxpayers with its worker's health care cost. Less than half of Wal-Mart's workforce is covered by the company's health insurance plan. Failure to pass this bill will send the wrong message and permits large companies to continue their business of subsidized health care at taxpayers' expense.

Keri Hoehne, Organizer for the United Food and commercial Workers Union Local 371, supports this bill. Few people choose to purchase Wal-Mart health insurance because is unaffordable. A friend of mine purchased health insurance through her employer, Wal-Mart. She obtained insurance for her and her infant daughter. The cost of healthcare was $210.00 every two weeks, despite the fact she only made $360.00 a week before taxes. Her insurance did not cover a lot of necessary test and doctor visits. The visits to her pediatrician often caused her bill to go up because certain visits were not covered under Wal-Mart's plan. She was forced to get HUSKY coverage so that her daughter could get the necessary treatment she needed. It is shameful that the richest company in the world and their employees must rely on state benefits for health care. Wal-Mart is the biggest corporate abuser of the taxpayer-funded public healthcare system. If the problem goes unaddressed and Wal-Mart continues its expansion plans, the Wal-Mart health care crisis will infect every state in America and billions of tax dollars will be needlessly wasted while workers and their families will either go without health care or be forced to depend on a public health care system already in crisis.

Denise Bayly, member of the United Food and Commercial Workers Union Local 371, supports this bill. As a result of her union contract, she has had wonderful health insurance for 28 years. Ms. Bayly never had to pay a dime in weekly premiums for health care. Everything is paid for. Unfortunately, her coworkers are forced to wait two years before they can apply for benefits. They either go without insurance and hope to never get sick or enroll in HUSKY. Just like at Wal-Mart, employees at Stop and Shop and other companies are encouraged to do the same. Many of her coworkers delay going to the doctors for checkups. This potentially means that they will not seek healthcare until they are sick enough to go to the emergency room. This cost is very expensive.

Kathleen Sloan, Executive Director of Connecticut National Organization for Women, supports this bill. This bill would be the first step in the creation of a level playing field. Connecticut must follow the example of Maryland which made history when it passed a bill requiring private companies, such as the retail behemoth Wal-Mart, to spend at least 8% of their payroll on healthcare for employees. It is time to stand up to big businesses and put the health and welfare of their constituents above corporate profits. Efforts are underway in 30 other states to pass such legislation, proving that the anti-business claim of some in this state is bogus. Wal-Mart employees, most of whom are women, deserve better than they have been getting from this retail giant. Wal-Mart executives are refusing to do the right thing on their own; it is the responsibility of the state to ensure they do.

Rusty Hamilton, Owner of Majolaine in New Haven, supports this bill. Mr. Hamilton has owned and operated a small business for 22 years at the same location. He employed four full time staff as well as high school students for weekends. He is fortunate of the employees he has; they have spouses with insurance. If he had to pay the cost of health insurance, he would not be able to keep the business going and would not be able to employ anyone including himself. He is a responsible owner and would like to be able to offer these benefits but in the current market cannot afford to.

Alice Pritchard, Executive Director, Connecticut Women's Education and Legal fund (CWEALF), supports this bill This bill represents a means for reducing the number of uninsured people while distributing the costs of health coverage more equitably. Women earn less than men and many are in the positions that do not provide health insurance. Unmarried women are more likely to be uninsured or reply on public programs such as HUSKY. In Connecticut, there are over 360,000 people without health insurance. A system of universal health care is ultimately the best way to meet the needs of all Connecticut citizens and businesses.

Jim Gehrer, Co-director, Media Arts Center, supports this bill. He and his partner operate a business that provides classes in video production. They have private insurance coverage for themselves. They are unable to consider other permanent employees since the cost of health insurance cost would be prohibitively expensive. Wal-Mart and other corporations are taking advantage of the state health care system. They happily accept tax breaks and encourage their employees to seek assistance while amassing their fantastic profits. Why must families and small business subsidize these behemoth corporations? CT needs to support small businesses and families.

Linda Bergonzi King, TriBella Productions, supports this bill. Ms. King owns and operates a small public health communication company and has done so for 15 years. She is self-employed and pays exorbitant health care costs for coverage for her family. Her husband has been hospitalized for back surgeries that put him out of work. Ms. King was forced to close her business and find a job with benefits. During this period she also delivered a baby prematurely. The baby's health care has exceeded $ 1 million dollars. She can only imagine the cost of health care to her family if she had still been self employed. If she could have afforded insurance she would still be self-employed today.

Small employers are suffering. While we try to take care of families and stay in business, huge, international, mega-corporations are taking advantage of the state health care system. Ms. King feels this is unfair and puts small businesses at a competitive disadvantage.

Keely Wolf, graduate student at the University of Connecticut, School of Social Work, supports this bill. Ms. Wolf supports this bill not only as a social worker, but as a citizen that is concerned with the communities in our state. Healthcare has become a basic need, not an option. As a young adult planning to live and work in Connecticut, her fears are that the possibility of healthcare for her will not be met.

Delora Musslin, graduate student at the University of Connecticut, School of Social Work, supports this bill. Ms. Musslin is an advocate of social justice, as a student of social work and a person concerned about the welfare of community members. Having good health care coverage is a vital importance to the stability of any person's health. When a company denies their employees the right to have complete health care coverage at a cost that they can afford, that company is contributing to the detriment of their workers health. Wal-Mart is not living up to their responsibilities in taking care of its employees. With high premiums and high deductibles the average Wal-Mart employee with family is paying a high price for the company's “everyday low cost”.

Lynn Cybulski, graduate student at the University of Connecticut School of Social Work, supports this bill. Most employers are well above the $2.50 standard. For example, Electric Boat pays $5.76 per hour, per employee and stop and Shop pays about $3.50 per hour per employee. Wal-Mart is paying around $1.30 for their employees' heath coverage. Wal-Mart is placing a huge burden on the state. Connecticut is supplementing this private business by paying for the health care coverage of its employees. Small businesses should not have to shoulder the cost of their competitor's health care through their taxes. This legislation needs to be passed so that large employers will pay their fair share.

Esther Gonzalez, graduate student of the UCONN School of Social Work, supports this bill. As a family, we were taught the value of good health; it is more precious than possessions. We were fortunate to be able to go to a doctor when we were sick; Ms. Gonzalez has found that everyone does not have this same benefit. All health care insurance are not the same, some cover less than others and she believes this bill will set a rate that can raise the level of coverage.

Alicia Hill, graduate student at the University of Connecticut supports this bill. Accessible health care is an issue that is important. It is an issue that affects 46 million Americans. Despite employees making below livable wages, employers continue to charge inconceivable amounts for health care, which has forced many families to seek assistance from the state program HUSKY. It is imperative that companies be held accountable for refusal to provide affordable health care. This health care decision would help her aunt, who works for Wal-Mart. She has been employed for over 5 years and has seen little increase in her pay. She is struggling financially and mentally. She has to figure out ways to provide for herself and also her family. She has to explain to her children why they are unable to make ends meet. She has to tell her children she spent the last $50.00 they have for living expenses on medicine.

Orisha Y. Scott, graduate student at the UCONN School of Social Work, supports this bill. A close friend of Ms. Scott is employed at Wal-Mart. She has worked there for over 5 years. After five years of service she is struggling at close to minimum wages. This puts her out of consideration as well for a company health care plan that she finds “over the top expensive”. She has to resort to Medicaid as the only feasible option. Wal-Mart continues to devour competition with its price-slashing fixation, dwindling career development opportunities beyond Wal-Mart for employees who share in the plight of my friend. How does a company with such impressive profit margins avoid providing affordable health care for employees and their families?

Bonnie Stewart, Coalition for a Competitive Connecticut and Connecticut Business & Industry Association, opposes this bill. There are three areas that need to be addressed in order to improve Connecticut's economy and its job opportunities for its citizens. They include making our costs more competitive, building a dependable infrastructure, and ensuring a skilled workforce. Health care cost is a significant slice of the competitive pie. A Fair Share Health Care surcharge would create a new “pay or play” health care tax on employers without regard to the primary reason why individuals and companies struggle to maintain health insurance. Any state that imposes a serious employer mandate would soon find itself at a competitive disadvantage in attracting and keeping jobs in that state. Connecticut's 2005 “pay or play” proposal dealt a devastating blow to the state economic image and promoted an anti-job and anti-competitive perception about the state. The economy, jobs, and health care are important issues that the committee and business community must address.

Chris Buchanan, Senior Manager of Public Affairs, Wal-Mart, opposes this bill. Every employer in America is dealing with the rising cost of health care and share a concern about the number of Americans who are uninsured or relying on government programs. Wal-Marts' insures more than 1 million associates and family members, making it one of the largest private sector providers of health insurance in the country. Wal-Mart is continuously working to find affordable, accessible health benefits solutions for our associates. The insurance offers are tailored to the needs of our diverse workforce and associates are provided a great deal of choices. Another attractive feature of our plan is that after one year, there is no lifetime maximum on health care expenses, which protects employees and their families from catastrophic loss.

Louise DiCocco-Beauton, Greater New Haven Chamber of Commerce, opposes this bill. A “pay or play” health care tax bill does not address the problem with health care and the reason why companies constantly struggle to provide and maintain health insurance for their employees. Providing quality and affordable health care benefits is a top priority for Connecticut businesses. Employers recognize the importance of providing adequate health care coverage; it is a competitive benefit and critical component in attracting and retaining employees. The CGA opened the session with bipartisan support for measures to increase jobs and improve economic growth. This bill sends the wrong message and promotes an image that Connecticut is a business unfriendly state.

Oz Griebel, President and CEO of the Metro Hartford Alliance, opposes this bill. The Alliance conducted a selector tour, where it was hosted in 12 global site locations, consultants and corporate real estate executives to explore our region and all that it has to offer- from accessibility to adaptability. Connecticut's anti-business climate represses growth. Site selectors nationwide assess the business climate when considering where to relocate or expand, and in doing so they evaluate the legislation that is offered by the General Assembly. By raising legislation, that would impose another tax on business. You are sending the wrong message to existing businesses and lessening the ability to be competitive across the country. This bill is not a potential solution to the problem of affordability. It is a penalty on employers, the same employers that want to relocate and expand their business in Connecticut.

AT&T opposes this bill. RSB 462 is legislation CT can ill afford at a time when lawmakers' declared priority is improving the state's business climate. This bill would increase the cost of doing business in our state, causing other companies not to relocate or grow here. The bill does nothing to slow the rapid escalating costs of health care and health insurance, key barriers today to consumers and employers alike. This bill would interfere with the collective bargaining process for AT&T employees. If expanding access to health care is the goal of “fair share”, setting requirements for health care expenditures per employee would ultimately encourage companies to reduce or eliminate coverage for retirees and dependents.

Peter Gioia, Connecticut Business & Industry Association, opposes this bill. The ability for Connecticut to create jobs depends in part of an effective and efficient system of economic assistance of development. This bill would a cost and red tape to publicly financed construction projects funded in part by DECD, CDA or CII that exceeds $1million. This bill unnecessarily complicates these agencies' work and in many instances adds costs and delays.

Johnna G. Torsone, Senior Vice President & Chief Human Resources Officer, Pitney Bowes, opposes this bill. Pitney Bowes addressed the rising cost of health care in 1990. It made a business decision to address this employee benefit to both manage increased costs and to attract and retain employees. We have taken innovated steps that allow us to retain quality health coverage for our employees while managing costs increases. This legislation will mean a higher cost burden on everyone as the focus shifts from managing care to controlling costs. Any action taken in Connecticut that will place a burden on businesses means that companies will be unable to grow in our state or invest in its communities through contributions or spending on goods and services.

Taren McKinney, Government Affairs, Middlesex County Chamber of Commerce, opposes this bill. Connecticut is currently uncompetitive, and if this legislation passes, our economy will become even more damaged and less attractive to existing and new businesses. We can not afford to allow such an extreme measure to take affect. There are better solutions to this problem that would address the health care cost drivers gradually and fairly.

Matthew Shay, President, International Franchise Association, opposes the as drafted during the public hearing, but his concerns were addressed by JFS language.

	Cynthia M. Morgan	3/14/2006
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