March 05, 2009

Where does NYSUT stand on proposed fees for self-funded health benefit plans?

Source: NYSUT Legislative Department

HEALTH ASSESSMENT TAX ON SELF-FUNDED HEALTH BENEFIT PLANS

  • S-58-A Budget Finance Committee
  • A-158-A Budget Ways and Means Committee

NYSUT is greatly concerned with the Executive Budget proposal to impose a health assessment fee on health benefit claims processed by third-party administrators for self-funded health benefit plans.

The concern involves the harsh impact this tax will have on non-profit entities like school districts, colleges and universities, hospitals and union benefit funds that, out of the need to reduce costs for their members, chose self-funded health benefit plans. NYSUT strongly believes that if third-party administrators have a $1 assessment fee on each claim over $20 forced upon them by the state, then that cost to process those claims will, inevitably, be passed onto the employees who are already feeling the weight of these hard economic times.

While NYSUT is fully aware of the economic distress that has befallen New York state, we do not believe that the imposition of a tax on health benefit claims that, ultimately, will seriously restrict the affordability of health benefits for New York state citizens, is the logical approach. The end result of this tax on educational institutions, health care institutions and union benefit funds can only be sharp reduction in benefits, services, and jobs - and will lead other cost cutting measures.

Enactment of this legislation would dramatically increase health benefit costs for employers; it would also put additional pressure on local taxpayers.