Kudos this week to the Insurance Committee for defusing the potential cost impact on employers of a bill (SB-41) that would have barred long-term disability payments to be offset by Social Security payments.
However, at the same time, the committee was also preparing to vote on several measures that will push health care costs higher in Connecticut.
The Insurance Committee has been more understanding of the concerns of the state’s business community over the pressures of rising health care costs. The committee’s unanimous, bipartisan vote on SB-41 was an impressive and appropriate action.
The committee prevented SB-41’s potential of not only increasing companies’ business operating costs, but also putting those companies in the position of either dropping the benefit altogether (which is voluntarily afforded to employees and is not required) or reducing the overall amount of long-term disability coverage they offer.
Now, the bill only requires the employer to tell its employees that their long-term disability payments may be offset by any amounts they receive from Social Security.
It will be interesting to see if that kind of understanding continues regarding new health care mandates – laws requiring insurance coverage for special procedures and treatments. Mandates, as a whole, increase the cost of health insurance by as much as over 50%, according to the Council for Affordable Health Insurance.
Worse, mandates raise costs higher for small businesses that are struggling hardest to afford quality health insurance for their employees and their families.
Larger companies can avoid these state-imposed rules by self-insuring, a process which requires large companies to pay all of their employees’ medical claims, but also allows them to avoid state mandates and solely be governed by federal law.
Without the working capital that’s needed to reserve funds to pay for these claims, small businesses tend to be self-insured, and thus, governed by state law—with all its costly mandates.