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May 23, 2005
As the first session of the 143 rd General Assembly approaches its last month, there is much yet to be decided. The business community is hoping for gross receipts tax relief; contractors look forward to a substantial bond bill (capital spending); the administration is due to issue draft workers compensation reform legislation; and a considerable number of bills with the potential to impact business await action.
Revenue and Taxation
The Delaware Economic and Financial Advisory Council’s (DEFAC) latest forecast (May 16) of an additional $94 million brings the total revenue increase in DEFAC projections for the year to $258.6 million. Increasing proceeds from corporate and personal income taxes are largely responsible for the sunny revenue picture. Strong revenue forecasts have increased optimism in many quarters that gross receipts tax relief will be possible this legislative session.
The gross receipts tax is levied on a company’s gross revenues rather than its net profit. This is particularly unfair given that a company can be losing money and still be responsible for a substantial gross receipts tax bill. Currently, businesses grossing in excess of $50,000 per month ($1 million in the case of manufacturers) are obligated to pay the tax. This tax harms our economic competitiveness relative to surrounding states. The Chamber is particularly concerned about our manufacturing base. There are a number of manufactures doing business in our Delaware who are not obligated to pay this tax on facilities elsewhere.
Governor Minner has indicated that she would seriously consider a gross receipts tax cut should May and June DEFAC projections indicate that financial conditions warrant it. Representative Deborah Hudson (R-Fairthorne), chair of the House Revenue and Finance Committee has introduced legislation, House Bill 159 that would cut the gross receipts tax across the board by 25%, increase the monthly exemption from $50,000 to $70,000 and eliminate the second tier tax paid by grocers. The total cost of Representative Hudson’s legislation would come to approximately $50 million. Representative Hudson’s legislation was released from the Revenue and Finance Committee on May 11 and was subsequently assigned to Appropriations. Ultimately, the amount of tax relief forthcoming at the end of the session will be the result of late session negotiations among House and Senate leadership and Governor Minner as well as key members of her administration.
The New Castle County Chamber of Commerce supports the reduction and eventual elimination of the tax.
Workers Compensation Reform
The business lobby anxiously awaits the administration’s draft workers compensation legislation. At this point details as to what will be in the legislation are not available. Most in the business lobby agree that the legislation will not contain provisions for employer directed care. Instead the legislation may contain some certification requirements for doctor’s treating workers’ compensation cases and the establishment of case management personnel at the Department of Labor to aid small businesses in managing their workers compensation cases. Governor Minner acknowledged in her State of the State address at the beginning of session that workers compensation costs have become a serious problem and pledged to seek passage of reform legislation. Her statement on the issue was encouraging. However workers compensation is one of the most complicated policy issues facing the business community in Dover . Nearly every potent interest group in the capitol has a compelling interest at stake. The general business community, organized labor, trial lawyers, physicians, insurance companies, state government and other health care providers (chiropractors, physical therapists, etc.) are all involved in the debate. The diversity of interest groups helps explain the difficulty in achieving meaningful reform. Delaware consistently ranks highest in the region overall in workers compensation costs. This creates problems for businesses from the smallest operations to the largest, whether self-insured or insured through a carrier. Delaware contractors are losing out on bids versus out of state firms due to their built in discount of 5% or more based on their lower workers compensation costs. Our automobile plants, though self-insured, experience higher workers compensation costs ( Delaware ranks first in the region in medical cost per claim) than those elsewhere in the nation. Even small office-based businesses with seemingly low risk have experienced substantial increases in premium costs (we rank at the top in this category as well) in recent years. Clearly something must be done. It our hope that the forthcoming legislation leads us toward a solution. Minimum Wage Senator Bob Marshall (D-Wilmington) has introduced Senate Bill 62, legislation that would increase Delaware ’s minimum wage from $6.15 per hour to $6.65 per hour effective January 1, 2006, and from $6.65 per hour to $7.15 per hour effective January 1, 2007. The Chamber opposes this legislation. The Chamber believes that markets should determine prices (including the price of labor). Delaware already has a higherminimum wage than surrounding states and the federal government by $1.00. Proponents present this legislation as a way to help low income workers. In truth, relatively few adult workers are actually paid minimum wage. Enactment of this wage hike would actually have a an inflationary effect all along the wage scale.
Education The
three tiered diploma is a thing of the past. House Bill 3, sponsored by
Representative Pam Maier (R-Drummond Hill) abolished the three-tiered
scheme. The General Assembly created the three-tiered diploma in 2000
as part of efforts toward educational accountability. Students would have
been awarded a basic, standard or distinguished diploma based on their
score on the DSTP (Delaware Student Testing Program) exam. The DSTP exam
was administered in tenth grade. 2005 would have been the first school
year in which these graduated diplomas would have been issued. Under the
new law, students who meet current graduation requirement will be receiving
a “State of Delaware High School Diploma ”. However, students graduating
in 2007 will be eligible for either a State of Delaware High School Diploma
or a “State of Delaware Distinguished Achievement Diploma ”. Students
who received their diplomas in 2004 and 2005 can apply to be upgraded
to the Distinguished Achievement Diploma if their academic performance
meets the criteria established by the Department of Education (standards
due by 2006). Rather than tying the diploma solely to the
DSTP, the law requires the Department to establish “a li st of alternate
academic indicators, proficiency levels for those indicators and for the
DSTP, and the combinations thereof that qualify a student to receive a
diploma . For the purposes of this Act, these indicators must include,
but may not be limited to: assessments such as the Preliminary Scholastic
Aptitude Test (PSAT), the Scholastic Aptitude Test (SAT), Advanced Placement
test scores, American College Test (ACT), local district assessments and
indicators used to determine student proficiency relative to the content
standards, and other assessments approved at the State level in a content
area.” House Bill 3 was signed by Governor Minner on May 17. The New Castle County Chamber of Commerce supports educational accountability, a unified statewide curriculum and a diploma that accurately reflects student performance. The Chamber was not wedded to the three-tiered diploma as a method of tying student performance to outcomes, particularly given the fact that, under the three-tiered scheme a student could score extremely well on their SATs, have a very high GPA and still only be eligible for the standard or basic diploma depending upon the outcome of their DSTP test administered in their sophomore year. For more information and a list of legislation of affecting the business community, please visit http://www.ncccc.com/legislativeeupdate.htm later this week.
Legislative E-Update May 17, 2005 Strong Revenue Forecasts Increase Optimism for Gross Receipts Tax Relief
The Delaware Economic and Financial Advisory Council’s (DEFAC) latest forecast (May 16) of an additional $94 million brings the total revenue increase in DEFAC projections for the year to $258.6 million. Increasing proceeds from corporate and personal income taxes are largely responsible for the sunny revenue picture. Strong revenue forecasts have increased optimism in many quarters that gross receipts tax relief will be possible this legislative session.
The New Castle County Chamber of Commerce has consistently advocated for the reduction of the gross receipts. Ideally, we would like to see this tax phased out over a number of years.
The gross receipts tax is levied on a company’s gross revenues rather than its net profit. This is particularly unfair given that a company can be losing money and still be responsible for a substantial gross receipts tax bill. Currently, businesses grossing in excess of $50,000 per month ($1 million in the case of manufacturers) are obligated to pay the tax. This tax harms our economic competitiveness relative to surrounding states. For example, there are a number of manufactures doing business in our Delaware who are not obligated to pay this tax on facilities elsewhere.
Governor Minner has indicated that she would seriously consider a gross receipts tax cut should May and June DEFAC projections indicate that financial conditions warrant it. Representative Deborah Hudson (R-Fairthorne), chair of the House Revenue and Finance Committee has introduced legislation, House Bill 159 that would cut the gross receipts tax across the board by 25%, increase the monthly exemption from $50,000 to $70,000 and eliminate the second tier tax paid by grocers. The total cost of Representative Hudson’s legislation would come to approximately $50 million. Representative Hudson’s legislation was released from the Revenue and Finance Committee on May 11 and was subsequently assigned to Appropriations. Ultimately, the amount of tax relief forthcoming at the end of the session will be the result of late session negotiations among House and Senate leadership and Governor Minner as well as key members of her administration.
The County Chamber has been working to advance gross receipts tax relief by working in a bipartisan fashion to encourage Democrats and Republicans in the House and Senate as well as members of the administration to cut this tax since the start of this legislative session. We have coordinated our efforts with colleagues at the Delaware State Chamber of Commerce and other business organizations from around the State.
We are grateful to Representative Hudson and members of her caucus for their advocacy for this and many other issues important to the business community. The Chamber also gratefully acknowledges the willingness on the part of the Governor and a number of key Democratic legislators to consider providing tax relief that will aid in preserving our economic base and in growing our economy.
Legislative E-Update March 30, 2005 Testimony Before the House Economic Development Committee Ronald Walker, President, New Castle County Chamber of Commerce
March 23, 2005
Mr. Chairman, committee members, thank you for allowing me the opportunity to speak with you today. My name is Ron Walker , president of the New Castle County Chamber of Commerce. We are the largest business organization in New Castle County and the second largest in the State of Delaware – behind our good friends and colleagues at the State Chamber. We strive to serve our members with advocacy at all levels of government, with numerous programs and events and by seeking to provide access to affordable health coverage to small businesses – a challenge in the best of times . We also work to promote prosperity and expand economic opportunity through our Economic Development Council, a partnership between and Chamber and New Castle County government.
I am very pleased to be here today with my colleagues from other Chambers in our great State. At the end of April chamber leaders from around Delaware will be meeting in Dover to discuss ways in which we can cooperate and form a common agenda to advance here in our capital. During this session, you will from time to time see Jim Wolfe and me here together in these halls to work in conjunction with our lobbyists to clearly communicate and advance the issues that matter most to the business community throughout Delaware . I am confident that we will be joined in those efforts by our colleagues from Chambers in all three counties. It is our aim to form an agenda that includes input from our smallest Chambers to our largest and to begin to foster true grass roots efforts at promoting economic growth and the preservation of our quality of life in Delaware .
The issues about which our members at the NCC Chamber are most concerned are workers compensation reform, the gross receipts tax, access to affordable health care and quality public education. I have with me today two members who are very active in our government affairs efforts at the Chamber, Reggie Braud , a member of our State Government Affairs Committee and vice president of Bancroft Construction in Wilmington, DE who will remark on the challenges facing his firm in the area of workers compensation; and Mark Kleinschmidt, vice chairman of our board of directors and a lobbyist for the Delaware Food Industry Council who will discuss why gross receipts tax relief is a critical component of our agenda.
The rising cost of health care for small businesses is a concern that we all share. We look forward to working with members of the General Assembly in both houses, Governor Minner and Insurance Commissioner Denn to improve the operation of the small group market in our state. We have participated over the course of the past few years in various subcommittees of the Health Care Commission, including the Small Business Health Insurance Task Force, and have been pleased to participate in discussions with Commissioner Denn, Representative Stone and Senator Blevins concerning their efforts to make health insurance more affordable and accessible.
In the area of public education, we continue to urge an emphasis on accountability. We are not wedded to one single solution as to how accountability is implemented; however, we join our colleagues at the State Chamber in urging a unified curriculum, testing to gauge student progress and a diploma that accurately reflects individual student achievement.
I will allow Reggie and Mark to offer their thoughts on Workers Compensation reform and gross receipts tax relief. Suffice it to say that we consider both crucial elements in preserving the economic health of our State.
Though challenges persist – particularly in the areas of workers compensation costs, health care costs and our tax climate - the New Castle County economy is healthy. Our unemployment rate as of year end 2004 was 3.4% versus a statewide average of 4.1% and a national rate of 5.4%. According to the Office of Labor Market Information at the State Department of Labor, job growth in Delaware came in at 2.1% for 2004 (or about 8800 jobs). They predict a slightly slower rate of growth for the next two years. We weathered the recession of the early part of this decade well and continue to be a corporate and banking center. However, we cannot afford to be complacent nor assume that the prosperity we enjoyed following the passage of the Financial Center Development Act in the early 1980’s will last forever. Much has changed in our state and in the global economy since the early 1980’s. More jobs are going overseas, in the manufacturing and service sectors. Mergers and acquisitions continue. The net result is jobs going elsewhere or being completely eliminated. We need to work to preserve and increase opportunities in Delaware to offset these trends. Tax relief, workers compensation reform, affordable and accessible quality health care, strong public education, the protection of our excellent legal environment, and sound infrastructure to support responsible growth are all critical components of preserving the excellent quality of life that Delawareans have come to enjoy.
I would like to add that Biotechnology offers significant promise for our state and regional economies. New Castle County is situated in a corridor where more than 80% of our country’s pharmaceutical companies are located. We have a world class University in Newark with significant talent and research capability and the Delaware Technology Park . It is our hope that the life sciences will over the coming decades provide the growth and prosperity that our chemical and financial sectors have. We look forward to the BIO 2005 conference that is coming to Philadelphia in June. More than 17,000 biotech professionals and other businesspeople will be coming to our region to meet, exchange ideas and do business. I would like to take this opportunity to thank DEDO and Governor Minner for her support of this conference.
I will conclude my remarks and turn the floor over to Reggie and then Mark. Once again, I thank the chairman and this committee for the opportunity to address you today.
January 31, 2005 STATE ISSUES The 143 rd General Assembly is underway and this January has been more interesting than any in recent history. Controversial cabinet nominations, pay raises and swiftly passed legislation to deal with a Delaware Supreme Court sentencing guidelines decision made January feel more like June – if only the weather had followed suit.
In her State of the State address, the governor stated her intention to work to address health insurance affordability and rising workers compensation costs. Her proposed approach to small group health insurance reform involves forming a statewide purchasing pool. The New Castle County Chamber of Commerce will be involved in the discussions planned in the coming months as legislation is drafted to address both issues.
On January 27, Governor Ruth Ann Minner made public her proposed budget, consisting of a general fund budget of $2.7 billion and a bond bill (capital budget) of $631.1 million, $333.3 million of which will be dedicated to transportation projects. Her proposed budget represents a 5% increase in spending over FY 2005. In her budget address, she outlined spending priorities in four key areas: education, health and safety, the environment and the economy. She clearly indicated that no tax cuts were included in her proposed budget, but that she would consider them in June should revenue projections warrant it.
In their response, the House Majority Caucus (Republicans) stated 5 key agenda items: elimination of the three-tiered diploma; considerable cuts in the gross receipts tax, which would begin a five-year period over which the tax would be eliminated; improvement of the farmland preservation process by creating a permanent funding stream for the Agricultural Land Preservation Program; an increase in compensation and the creation of a “career ladder” for Delaware Corrections Officers; and the addition of 100 additional troopers to the Delaware State Police.
The administration appears determined to take a cautious approach to gross receipts tax reduction this session while the opposition has chosen to make it one of their chief priorities. This may lead to either a scaled-back compromise reduction in the late session after the late-spring DEFAC projections come in, or, in a repeat of last June, no reduction at all. In mid-January, Governor Minner appointed two formers presidents pro tempore of the State Senate to her cabinet. Richard S. Cordrey and Thomas B. Sharp were appointed to the post of Secretary of Finance and Secretary of Labor, respectively. The appointments were initially greeted by surprise and some consternation. However, both were ultimately confirmed. Both are familiar with the Chamber and have related that they are looking forward to working with us.
Legislation of Note:
COUNTY ISSUES Law Changed to Allow for Cabinet Form of Government in New Castle County
In late January the General Assembly passed, House Bill 29, legislation that restores the ability of the New Castle County Executive to appoint a cabinet. The bill will allow County Executive Coons, with the advice and consent of New Castle County Council, to appoint individuals to head all County agencies to serve at his pleasure. In 1997, as part of the Gordon Administration’s reorganization of County government, legislation was passed placing department heads in the civil service system. House Bill 29, reversing that change, was greeted positively in most quarters as it will allow for greater governmental accountability. Department heads at the federal, state levels and in most municipal governments are appointed by the chief executive. At the time of this writing, the bill awaited signature by the governor. It is anticipated that the county executive will move to appoint a cabinet soon after the bill becomes law.
Coons Appoints Senior Executive Staff Soon after taking office, County Executive Chris Coons named his senior staff. They include David W. Singleton, Lynne Howard , Richard Przywara and Nicole Majeski. David Singleton, appointed chief administrative officer, recently served in Governor Minner’s cabinet as Secretary of Finance. He brings to the job many years of experience in both business and government, having served in the administration of Wilmington Mayor William McGlaughlin in the 1970s before beginning a career in banking that included senior executive posts with both JP Morgan and MBNA. Lynne Howard , named deputy chief administrative officer, was most recently chief of staff for Wilmington City Council. Prior to that, Ms. Howard served as an advisor to Governor Thomas R. Carper, as the executive director of the Delaware Association of Rehabilitation Facilities, and as director of rehabilitation and personnel for Goodwill Industries of Delaware. Richard Przywara, named chief of staff, was associate vice president for advancement at West Chester University and executive director of the Fund for West Chester . While at West Chester , he was responsible for major fundraising efforts and construction of privatized student housing. Mr. Przywara formerly worked for Widener University and the YMCA of Delaware in a variety of senior positions. He holds a master of public policy degree from the University of Delaware . Nicole Majeski, chosen as policy director, is a graduate of the University of Delaware and former executive director for the State Democratic Party. We at the New Castle County Chamber of Commerce extend our sincere congratulations to County Executive Coons and his senior executive team. We look forward to working with them for the benefit of the residents and businesses in New Castle County .
June 2004 STATE ISSUES 142nd General Assembly Ends, Tax Relief Not In the Cards
The 142nd General Assembly drew to close on June 30. A recovering economy and considerably improved fiscal condition for state government, though very positive developments on the whole, seemed to add to the contentiousness of late session budget negotiations. In the end, neither gross receipts nor personal income tax reductions were enacted.
The gross receipts tax is paid by Delaware businesses generating more than $50,000 per month in gross revenue. The Chamber views the gross receipts tax as both burdensome and unfair. The tax is levied without regard to the profitability of a business. A firm can lose money all year and still be obligated based on gross receipts to pay this tax.
House Republicans in January announced their proposal for a little more than $100 million in tax relief for individuals and businesses in Delaware. The caucus sought to reduce personal income taxes by 6.3% and to cut the gross receipts tax by 29%. The personal income tax reduction would have reduced state revenue by approximately $55 million while the gross receipts tax cut would have cut revenues by about $47 million. Their proposal met with resistance from the administration from the outset. The governor argued that such tax reductions would be premature at the early stages of an economic recovery. Citing a projected surplus and an overall healthy outlook for state finances, in May, House Republicans put the gross receipts tax cut proposal in legislative form. Representatives Deborah Hudson and Wayne Smith (majority leader) introduced HB 419. Speaker Terry Spence and Representative Bill Oberle introduced an amendment that would have provided additional relief for numerous small and midsized business by raising the monthly exemption from $50,000 to $100,000 for businesses affected by the tax. In June, Representatives Hudson and Smith followed with legislation to implement the personal income tax reduction proposal, HB 542. Negotiations continued into the last days of the session. Though the Senate had no plans to consider either bill, the House passed both measures on June 30. Votes for both measures fell along party lines with unanimous support from House Republicans and Democrats recorded as either “no” or “not voting” on the measures. Neither bill came before the Senate.
The New Castle County Chamber of Commerce will urge the 143rd General Assembly and the governor to consider tax relief in the next session.
Health Insurance Affordability a Key Legislative Issue Affordable health insurance for small businessess is among the most pressing economic issues facing state legislatures and Congress. Unfortunately, most proposed legislative fixes carry serious unintended consequences. Government imposed remedies rarely help markets function better. The Delaware Health Care Commission, chaired by Lieutenant Governor John Carney, spends considerable time and effort examining this issue and seeking solutions. As any participant in the policy making process will attest, there are no easy solutions. It is far easier to identify what will not work rather than what will. Representative Dennis Williams (D-Wilmington North) introduced House Bill 62, legislation which would have established a single payer health insurance system in the State of Delaware. The legislation was heard in committee and tabled. Proponents of single payer health care point to the United Kingdom and Canada as models for universal coverage. The truth is that these systems are creaking under the weight of their obligations and budgetary constraints. Routine tests and treatments require lengthy waiting periods and vital services are rationed. The wealthy frequently purchase privatre health insurance, go to private clinics and come to the United States for treatment. Representative Joe Booth (R-Georgetown) introduced House Bill 372, legislation that would have allowed business with 1,000 or fewer employees to enroll on the State plan. The enrolled businesses would have been responsible for payment for the full cost of the coverage. This logic behind this legislation was predicated on the faulty premise that allowing businesses to join the state pool would create an extremely large pool of insured lives, spreading risk and lowering premiums for the small businesses involved at no cost to taxpayers. In reality, taxpayers would have ended up assuming considerable insurance risk. The small businesses involved in such a program would not be able to set aside reserves to offset potential catastrophic health care costs. Such costs would at some point be borne by the state. While the aim of this legislation is noble, creating additional government subsidization of health care is not the way to create a more stable and better operating health care market. Enactment of Sweeping "Whistleblower" Legislation a Cause for Concern SB 173 sponsored by Senator Catherine L. Cloutier (R- Heatherbrooke), extends whistleblower protection to private sector employees and private contractors. While the Chamber believes that protection of true whistleblowers is important, we are confident that the existing protections in commonlaw as interpreted by federal courts here in Delaware provide sufficient protection.
During the recent General Assembly, the Chamber focused on two main legislative objectives in the area of workers compensation reform. The first objective was to improve the current system of rate classifications used by the Delaware Compensation Rating Bureau by allowing for sub-classifications that would allow for a more accurate assessment of risk and lower premiums for many job categories. The second objective would allow for employer directed care for a fixed period after a workers compensation claim is filed. This would help ensure that injured employees receive quality care in a timely fashion and that cases are successfully managed to allow for a safe and healthy return to the workforce for the employee and a lower cost per claim. Over time, this would lead to lower premiums for employers insured by an insurance carrier and lower health care costs for self-insured companies. The first objective was passed and signed into law in the form of House Bill 430. This legislation, sponsored by Representative Gerald Hocker (R - Ocean View), will allow insurers to create subclassifications under the existing workers compensation rating structure. Delaware's rate structure currently employs only 341 rating categories while other jurisdictions employ more than 1,000. This can result in employees being placed in rating categories that exagerate the risk associated with their profession - causing their employers to pay higher than necessary premiums. The Chamber lobbied vigorously for the passage of this bill until its passage by the Senate on June 30 (the House passed it on June 17). While this legislation is a step in the right direction, much more remains to be done. The Chamber's second, and more significant objective, remains undone. Health care expenses are the major cost driver in Delaware's workers compensation system among both large self-insured employers and the majority of other businesses which contract through a carrier for their insurance. SB 159, sponsored by Senator Thurman Adams (D-Bridgeville), included among its many provisions the ability to manage care under workers compensation. This legislation was not enacted. The Chamber will work during the course of the upcoming 143rd General Assembly to pass this critical reform. Workers compensation costs affect Delaware's economic competitiveness. In today's global economy, labor costs are a decisive factor in economic development success. If we are to attract and retain the jobs that Delaware needs to remain prosperous in the years to come, we need to solve the problem of rising workers compensation costs.
New Castle County Council Set to Double the Number of District Seats for the 2004 Election New Castle County Council will go from 7 to 13 members following the upcoming election. The Chamber opposed the expansion of Council and supported legislation before the General Assembly that would have allowed Council to remain a 7-member body. The legislation, Senate Bill 53, passed the Senate last year and passed the House in early January. It was subsequently vetoed. The Chamber based its opposition to expanding Council on the fact that it was unwarranted. Other considerably larger jurisdictions such as Fairfax County Virginia (population: approx. 1 million, size of council: 9) and Montgomery County Maryland (population: approx. 873,000, size of council: 10) have proportionally smaller Councils than the one we currently have. While it may be too late to opt for a smaller Council, it is not too late to work to ensure that we as members of the business community involve ourselves in the process of informing and supporting candidates who care about the issues that matter to us. More legislators will inevitably lead to more legislation and, by extension, more regulation, all of which will impact our local economy. “What can I, as a busy professional, do to help?” you may ask. There are any number of ways to get involved: from taking the time to question candidates about where they stand, to actively supporting pro-business candidates with your time and resources, to running for office yourself, you can make a difference. The outcome of the 2004 elections will determine the direction of County government for the next decade and beyond. Whether we are represented by legislators who recognize the need for sound, sustainable growth, or legislators who oppose any new development, regardless of its merits, is a matter of critical importance to the health of our local economy. Candidates Forums Scheduled for the Fall In recognition of the importance of the considerable changes on the horizon for New Castle County government, we have scheduled a series of luncheon forums (12:00 p.m. - 2:00 p.m.) at the Chamber where candidates will engage in a dialogue with our members on the issues that matter to us such as quality jobs, economic development, sound infrastructure, good planning and responsive, accountable government. Forums are scheduled for the following dates: Thursday, September 16, Districts
7 and 8 Our Candidates Forum Series is sponsored by:
FEDERAL ISSUES National Association Health Plan Legislation Could Threaten Affordability and Availability of Small Group Health Insurance Many business across the nation are being contacted by the U.S. Chamber of Commerce and other national membership organizations regarding the "Small Business Health Fairness Act of 2003". The bill passed the House in June (H.R. 660). The Senate version of the legislation (S 545), sponsored by Senator Olympia Snowe of Maine, is currently in the Senate Committee on Health, Education, Labor and Pensions. The legislation is touted by proponents as a way of expanding access to health insurance for small employers, hence reducing the number of uninsured. This is to be accomplished by allowing small businesses in national association plans to take advantage of the bargaining power and economies of scale that would seem to accompany membership in a nationwide pool. A study conducted by Mercer Risk, Finance and Insurance Consulting for National Small Business United reached a different conclusion:
For more information about how this legislation could negatively affect the affordability and availability of affordable small group health insurance in Delaware, visit www.sbhealthequity.org . CALL TO ACTION: We strongly recommend that members contact Senators Biden and Carper to express opposition to S. 545. Following is contact information for both Senators: Senator Joseph R. Biden, Jr.
Senator Thomas R. Carper
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