Health-insurance bill is a case of haves and have-nots

BY FELICE J. FREYER Journal Medical Writer

Rhode Island businesses are splitting into opposite camps on a proposal to require large companies to pay money to the state if they don't provide health insurance to their employees.

A coalition of primarily larger employers and their trade associations formed last month to fight the Fair Share Health Care Act -- even though all the members currently offer health insurance and would not immediately be affected if the bill became law.

The group, called Rhode Islanders for Responsible Health Care, says the bill creates an anti-business climate and opens the door to broader mandates. The coalition does not include Wal-Mart, the national retailer (with nine stores and 2,200 employees in Rhode Island) that is thought to be the target of the bill.

Meanwhile, the bill's proponents, a labor-backed group called Rhode Island for Health Care, has gathered 20 small businesses to support the legislation in newspaper ads. This group argues that it's only fair for all businesses to contribute to health care costs, and that large businesses are best able to do so.

Yesterday, the Senate Health and Human Services Committee began hearing testimony on the legislation. The bill springs from a nationwide effort to force businesses with 1,000 or more employees to pay into the health-care system, either by contributing to employees' insurance or contributing to a state fund. Proponents argue that when workers don't have health insurance, those who have insurance end up paying for the uninsured through higher premiums and taxes to support public health programs. A similar law passed in Maryland and is still alive in six states in addition to Rhode Island.

"All this bill is asking is that the state's largest and most profitable employers contribute their fair share to their employees' health care," said Ann Rhodes, director of Rhode Island for Health Care, part of a national project sponsored by the Service Employees International Union.

Paul T. DeRoche, of the Rhode Island Retail Federation, said that businesses are concerned about health-care costs, but "this legislation is not the answer." He said it would threaten job growth and "do nothing to get to the root of the problem."

The Rhode Island bill would require any employer with 1,000 or more employees -- there are 38 such businesses -- to report to the state what percentage of payroll costs goes toward health insurance for employees.

Starting Jan. 30, 2007, those that don't spend at least 8 percent on employees' health insurance will have to pay the difference between what they spend and 8 percent. The money will go into a state "Fair Share Health Care Fund." After Jan. 30, 2008, the target percentage would be the statewide average for such contributions by large businesses -- expected to be larger than 8 percent.

The state Department of Human Services would decide how to spend the fund, focusing on programs for the uninsured or other state health programs.

Dozens of people packed the hearing room yesterday to testify on the bill, but only a handful had a chance to speak because the hearing was cut short after a half-hour to observe the Passover holiday. Chairwoman Rhoda E. Perry, D-Providence, said the committee would continue taking testimony on the issue after the spring break next week.

William Connelly, owner of Connelly Travel, said he was a small-business owner who opposes the bill, because he fears the mandate will eventually be imposed on all employers.

Maria Gil is a small-business owner who came out to support the bill. She didn't get a chance to speak yesterday, but said in an interview that the cost of caring for uninsured people, who often seek treatment in hospital emergency rooms, was one of the reasons for the increases in health insurance premiums for her employees. She believes the bill would "level the playing field."

Bob Murphy, district manager for Labor Ready, a company that places temporary workers, said that the bill would increase costs so much that temporary workers will have a hard time finding positions, losing opportunities to move into permanent jobs --where they're likely to get health coverage.

Ruby Sweetwine, of Providence, said she worked for Wal-Mart for five years, and she couldn't afford health insurance or health care. As a result, she told the committee, an untreated health problem developed into a serious infection requiring hospitalization. "I know what it is not to have insurance," she told the committee. "I almost died."

» Return to "In the News"