Benefits March 10, 2006

Nutmeg State Debates Health Coverage Tax

March 10, 2006 (PLANSPONSOR.com) - Legislative fervor sweeping many parts of the country over the extent to which large companies are allegedly shirking their duties to provide sufficient employee health care has reached the Connecticut state capital in Hartford.

Reported by

Fred Schneyer

Thursday morning saw dual press conferences, and Thursday afternoon an often bitter legislative hearing, over a proposal that would effectively tax retailers – about $5,200 yearly per worker – who spend less than that amount covering worker health treatments, according to a Hartford Courant news report. Those retailers and franchise holders with 5,000 or more workers would be covered – at the moment, only Wal-Mart and Stop and Shop supermarkets.

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Here’s how it would work: Companies already providing coverage equal to the $5,200 annual per worker amount wouldn’t pay any additional money. Those providing less would be mandated to make up the difference.

Community activists, some small-business owners and Democratic legislators praised the bill at times as an answer to the economic squeeze that America’s middle class faces. Business lobbyists, other small-business owners and Republican legislators, meanwhile, said the measure would have a chilling effect on jobs and economic growth, the newspaper reported.

News reports said that the money collected from the tax would be used to reimburse the state for providing HUSKY health insurance coverage to low-income workers.

The “Fair Share” bill is based on the belief that employers such as Wal-Mart are shirking their responsibility toward workers while the government is ignoring the growing ranks – and costs – of the uninsured. Connecticut is among at least 25 states that have introduced bills designed to stem the erosion of employer-sponsored coverage (See CO Puts Off Health Care Bill , Kentucky Moves Closer To Adopting ‘Wal-Mart Bill’ , CA Lawmaker to Propose ‘Wal-Mart’ Health Coverage Bill ).

So far, Maryland is the only state to have passed such a measure (See Veto of ‘Wal-Mart Bill’ Overridden in MD Senate ).

Although other proposals have failed in about 10 states, Republican lawmakers in New York introduced legislation earlier this week that would apply to an even broader range of employers than Connecticut’s proposal, and would tax them more.

While their health programs were such a big topic in the states, Wal-Mart officials weren’t exactly sitting on their hands. (See Wal-Mart CEO Fires Back about Health Care Bills ). The company also recently unveiled a seires of health care improvements (See Wal-Mart Unveils Employee Health Coverage Improvements ).