Proposed Mandates Threaten Small Business Healthcare Costs

Rising health insurance costs are a top concern for Connecticut employers, especially small businesses.
Federal and state laws and regulations are major factors driving the cost of health insurance.
Connecticut, for instance, has 66 healthcare mandates on its books. It’s no coincidence that healthcare costs in this state are among the highest in the country.
Nonetheless, the legislature’s Insurance and Real Estate Committee approved 10 additional mandates this week.
Mandates contribute to the cost of healthcare for businesses in the small and large group markets by requiring insurance carriers to provide specific coverage, leaving them no choice but to charge higher premiums.
But the cost of health insurance directly impacts businesses and the state’s economy in other ways as well.
For instance, the burden of health insurance costs on businesses contributes to wage stagnation—employers can’t afford to pay their workers more when healthcare costs rise constantly.

Benefit Costs Consume Wage Gains

U.S. Bureau of Labor Statistics data show that health insurance has increased as a percentage of total compensation over the past 10 years.
While total compensation tends to increase as labor markets tighten, take home pay suffers as benefits consume the entirety of the gain.
Some employers have been forced to offer less rich health plans in lieu of dropping health coverage for employees entirely.
Additionally, if health insurance is too expensive, small businesses that are not required to offer it will decline to do so.
And larger employers subject to the employer mandate will resort to reducing other forms of compensation or finding ways to automate production.
The cost of employer-sponsored health insurance has a cumulative impact on the state’s overall economy.
Adding more mandates to employers only makes it worse.

For more information, contact CBIA’s Michelle Rakebrand (860.244.1921) | @MRakebrand