At the Greater New Britain Chamber of Commerce, our mission is to â€śPromote the economic, industrial, professional, cultural, commercial, educational, and civic welfare of Greater New Britain.â€ť In order to follow through on that mission statement, it is our responsibility to speak out against any policy that hurts our employers and their employees. This is why I am writing to express our concerns about two bills currently moving through the state legislature that will create a new tax on health insurance for Connecticut business owners and their employees, middle-class families, and individuals.
Senate Bill 842, also known as the â€śPublic Optionâ€ť bills, as well as Governor Ned Lamontâ€™s proposed budget (House Bill 6439) both include this tax that will make it harder and more expensive for employers to provide health insurance in the middle of a global health crisis. There are several myths circulating within the state about the function and effect of this bill. Here at the Greater New Britain Chamber, we want to set the facts straight.
One myth weâ€™ve heard put forward about this health insurance tax is that the state desperately needs revenue in order to expand healthcare coverage and increase affordability. The fact is Connecticutâ€™s budget and healthcare outlook have changed fundamentally since the federal stimulus money for the states was approved as part of the American Recovery Plan. We have $10 billion in federal aid pouring into the state to support a variety of needs. This includes support for expanded financial assistance and coverage options through Access Health CT â€“ our stateâ€™s insurance exchange as created by the Affordable Care Act.
A recent article in the New Haven Independent outlined some of the changes that will come with the new federal dollars, estimating that subsidies on the exchange will increase by $100 for those purchasing healthcare. In other words, families will pay less for the cost of their health care.
The second myth is the notion that the State of Connecticut desperately needs revenue in general. Across the country, many businesses have closed and millions of people have become unemployed due to the COVID pandemic, the result being sharply declining revenues in many states.
However, this is not the case in Connecticut. These health insurance taxes will funnel money from Connecticutâ€™s working class straight into our general fund, which already has a surplus. In fact, Comptroller Kevin Lembo recently hosted a press conference, boasting a $180 million projected budget surplus in Connecticut for this year. The surplus was on track to exist even before federal relief was approved. This is a result of our thriving housing market and strong performances in the stock market.
Not only will this new health insurance tax rob hard-working Connecticut business owners and employees, the Connecticut General Fund doesnâ€™t even need the money. On the other hand, our working-class families do.
The third myth that weâ€™ve heard is that this new tax will primarily affect Connecticutâ€™s insurers. This is not the way these proposals will function.
This tax would fall not on insurance companies, but on local businesses that pay for the insurance.
Those increased costs will likely result in increased prices to consumers to cover the increases. These are the businesses that purchase healthcare for their employees on the exchange, and thus the ones that will have to cough up the funds for this tax.
A similar health insurance tax existed at the federal level, and when it was repealed, it lowered premiums by an estimated $500 per employee on family plans. This provided much needed relief to workers and families receiving insurance from an employer, which is exactly why Democrats in Congress overwhelmingly supported its repeal.
Consumers and businesses cannot afford an extra burden on their health care costs. Distinguishing between fact and fiction is more important than ever when it comes to costs on Connecticutâ€™s employers and their employees. These myths have a very real effect on Connecticut businesses, which desperately need help in the wake of the coronavirus pandemic.
Governor Lamont and our state lawmakers should reconsider these misguided policies which will raise health care costs for working class individuals, families and local business owners.
William D. Moore is the President and CEO of the Greater New Britain Chamber of Commerce.