By Dale J. Venturini
President & CEO, Rhode Island Hospitality and Tourism Association
Across the country, organized labor is making a move, in essence, to create a universal healthcare system, on the backs of business owners. Last year Maryland was the first state to pass what has been dubbed the “Wal-Mart Legislation,” which requires companies with 10,000 or more employees to spend at least eight percent of payroll on healthcare. While Wal-Mart is the only company in Maryland that the legislation impacts, before the ink was dry, legislators submitted new legislation to lower the number of employees. Similar legislation is being considered in 36 states, including Rhode Island. It is the intention of labor to pass legislation that would impact only a small number of companies to quell opposition to the legislation, only to turn around seconds later and propose legislation requiring most, if not all, businesses to provide health coverage.
Massachusetts recently passed legislation requiring all companies with more than 10 employees to provide healthcare to all employees, or pay a $295 fee per employee to the State of Massachusetts. The legislation is expected to bring a $45 million windfall to the State of Massachusetts, at the cost of Massachusetts business owners.
Healthcare mandate legislation forces business owners to provide health insurance, but does nothing to address the issue of access to affordable health insurance. Rhode Island’s hospitality employers provide their workers with robust benefits that accommodate the unique dynamics of the hospitality workforce, a workforce dominated by young people, non-heads of household, and part-time and seasonal employees, many of whom have coverage through sources other than their employer. Imposing an arbitrary payroll tax on an industry with already slim profit margins will force employers to make a choice between laying off workers or raising prices.
In recent years, small business owners have seen healthcare costs skyrocket, with annual increases in the double digits. Mandating health coverage for all employees or mandating a company spend a certain percentage on healthcare for employees will do nothing to curb the cost of health care for business owners. While mandates make health insurance more comprehensive, they also make it more expensive. According to the Washington Policy Center, mandated benefits increase the cost of basic health coverage from a little less than 20 percent to more than 50 percent.
Why are healthcare mandates so popular? Elected representatives find it difficult to oppose any legislation that promises enhanced care to potentially motivated voters. The sponsors of mandates know this fact of political life. As a result, government interference and control of the health care system is steadily increasing. So too is the cost of health insurance.
In recent years, Rhode Island has made strides at becoming more attractive to business, with the tax credit program, and recently proposed overhaul of the state’s income tax structure. We applaud the Legislature’s efforts, but caution that mandating healthcare is a step backwards. Further, we encourage state and federal policymakers to focus on ways to control health care costs, improve health quality and provide affordable coverage to employees of employers large and small.
The Rhode Island Hospitality and Tourism Association has joined forces with the Greater Providence Chamber of Commerce and the National Federation of Independent Businesses to fight healthcare mandate legislation in Rhode Island.
Across the country, organized labor is making a move, in essence, to create a universal healthcare system, on the backs of business owners. Last year Maryland was the first state to pass what has been dubbed the “Wal-Mart Legislation,” which requires companies with 10,000 or more employees to spend at least eight percent of payroll on healthcare. While Wal-Mart is the only company in Maryland that the legislation impacts, before the ink was dry, legislators submitted new legislation to lower the number of employees. Similar legislation is being considered in 36 states, including Rhode Island. It is the intention of labor to pass legislation that would impact only a small number of companies to quell opposition to the legislation, only to turn around seconds later and propose legislation requiring most, if not all, businesses to provide health coverage.
Massachusetts recently passed legislation requiring all companies with more than 10 employees to provide healthcare to all employees, or pay a $295 fee per employee to the State of Massachusetts. The legislation is expected to bring a $45 million windfall to the State of Massachusetts, at the cost of Massachusetts business owners.
Healthcare mandate legislation forces business owners to provide health insurance, but does nothing to address the issue of access to affordable health insurance. Rhode Island’s hospitality employers provide their workers with robust benefits that accommodate the unique dynamics of the hospitality workforce, a workforce dominated by young people, non-heads of household, and part-time and seasonal employees, many of whom have coverage through sources other than their employer. Imposing an arbitrary payroll tax on an industry with already slim profit margins will force employers to make a choice between laying off workers or raising prices.
In recent years, small business owners have seen healthcare costs skyrocket, with annual increases in the double digits. Mandating health coverage for all employees or mandating a company spend a certain percentage on healthcare for employees will do nothing to curb the cost of health care for business owners. While mandates make health insurance more comprehensive, they also make it more expensive. According to the Washington Policy Center, mandated benefits increase the cost of basic health coverage from a little less than 20 percent to more than 50 percent.
Why are healthcare mandates so popular? Elected representatives find it difficult to oppose any legislation that promises enhanced care to potentially motivated voters. The sponsors of mandates know this fact of political life. As a result, government interference and control of the health care system is steadily increasing. So too is the cost of health insurance.
In recent years, Rhode Island has made strides at becoming more attractive to business, with the tax credit program, and recently proposed overhaul of the state’s income tax structure. We applaud the Legislature’s efforts, but caution that mandating healthcare is a step backwards. Further, we encourage state and federal policymakers to focus on ways to control health care costs, improve health quality and provide affordable coverage to employees of employers large and small.
The Rhode Island Hospitality and Tourism Association has joined forces with the Greater Providence Chamber of Commerce and the National Federation of Independent Businesses to fight healthcare mandate legislation in Rhode Island.
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