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Another Voice: State is taking away self-insurance as a health coverage option

By Robert W. Tenney

Some legislators in Albany have a bizarre message for many of the state’s mid-sized businesses – quit offering your current health benefits.

Starting next year, firms with between 50 and 100 workers will effectively be banned from “self-insuring” – that is, paying their employees’ health costs directly, instead of buying coverage from a traditional insurer.

Many of these firms have self-insured for decades because it can save them significant amounts of money. The company I lead, Mid-York Press, is one of them. If we lose the ability to self-insure, our health costs will skyrocket next year.

There are scores of other small and mid-sized firms across the state facing a similar predicament. It’s time for state lawmakers to offer us some relief – by ending their years-long crackdown on self-insurance and restoring access to this valuable means of providing health coverage.

For many companies, self-insurance is an effective way to rein in health costs while providing high-quality coverage that’s tailored to a workforce’s unique needs.

By making companies directly responsible for their workers’ health claims, self-insurance creates a strong financial incentive for businesses to look after their employees’ health.

Consequently, many companies establish wellness initiatives that encourage employees to adopt healthy lifestyles.

My firm, for instance, offers a smoking cessation program that pays employees $500 to quit, as well as a series of cancer seminars to help our staff detect early signs of the disease.
And unlike companies with conventional health plans, self-insured organizations have access to employee claims data. This information can help firms identify the main drivers of company health spending – and devise strategies for addressing those problems.

Add it all up, and self-insured plans can deliver remarkable savings. Since switching to self-insurance in 2012, Mid-York’s health costs have dropped about 25 percent, relative to what they would have been with conventional insurance.

That’s equivalent to about $200,000 in savings every year.

Unfortunately, stop-loss policies are increasingly off-limits to New York firms. Companies with 50 or fewer workers have been prohibited from buying stop-loss insurance for years. Lawmakers recently expanded the ban on stop-loss to firms with as many as 100 workers.

The only way to bear those additional costs will be to slash wages, lay off workers or relocate to a more accommodating state.

Fortunately, several New York lawmakers are fighting to preserve access to stop-loss coverage for mid-sized companies.

These reforms are all that’s needed to end New York’s senseless war on self-insurance – and to keep companies like mine from taking their business elsewhere.

Robert W. Tenney is president and chief executive officer of Mid-York Press, a printing firm with 72 employees based in Sherburne.

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