Employers seek help in Olympia

Journal of Business, Feb 21, 2008 by Proffitt, Emily

Advocates for Washington state employers say there's little hope the Legislature will act this session on proposals to ease the growing cost and complexity of providing employee benefits. Instead, they say, they'll be mostly playing defense as legislators mold the new Family Leave Act further and consider bills that could lead to major changes in the state's health-insurance landscape.

Topics under debate during the short legislative session also include the establishment of a group that would study different types of health-care reform models and adjustments to worker's compensation premiums for business that have employees working out of state. Most issues, though, likely will be discussed more extensively by lawmakers in the 2009 session, both because legislators who are up for re-election this year are wary of giving their adversaries ammunition by passing controversial laws this session, and because 2008's session is a nonbudget-writing session. This year's regular session is scheduled to end March 13.

"We're pretty much on defense this session," says Kris Tefft, general counsel for the Olympia-based Association of Washington Business. "It's a short session, so some bills will die because there's not enough time to process the sheer volume of bills that have been introduced."

The No. 1 priority for business groups this session involves the Family Leave Act of 2007. Starting in October 2009, the bill mandates five weeks of paid family leave for workers who adopt or have a child, Tefft says. Legislators are considering bills this session that focus on the program's implementation, but likely still won't decide how it will be funded, he says. The law applies to companies of any size.

Decisions about funding are critical, given that the projected cost to set up and operate the program for the first two years will total an estimated $113 million, Tefft says. Currently, the two funding options that have been proposed are to draw from the state's general fund or to charge a payroll tax on workers, he says.

"The issue that seems to be off the table this session is how in the world they're going to be able to pay for this thing," Tefft says. "We're still left scratching our heads, and we want to get it nailed down because the longer the issue is unresolved the more attractive taxing businesses might be."

The AWB also wants the Legislature to allow employers who already provide paid family leave to opt out of the program, says Don Brunell, the group's president. Proponents of the law, though, are reluctant to allow employers to opt out, because they say too much potential revenue will be lost if that happens, he says.

"We didn't support the bill from the beginning, so ideally for us they would repeal it," Brunell says. "That won't happen, though, so we're trying to get the 'opt out' provision."

Bills related to health-care benefits also are among the hot topics this session. In the 2007 session, lawmakers considered a bill that contained an amendment to allow businesses to choose a stripped-down, core-benefits health plan, also referred to as a "mandate-light" plan because the amendment would have shed some of the coverages the state mandates in insurance plans, says Carl Gipson, director for small business at the Seattle-based Washington Policy Center. While the Legislature passed the bill, it stripped that amendment from it, he says.

Although lawmakers aren't considering any "mandate-light" bills this year, the topic is a high priority for business groups and is expected to resurface in the 2009 session, Gipson says.

Meanwhile, a bill that's being considered in the House would establish a Citizens' Work Group for Health Care Reform that would study five types of health-care reform models, says Troy Nichols, Washington state director of the National Federation of Independent Businesses. One of those models involves a "health-plan light" concept, Nichols says. While NFIB supports studying health-care reform options, legislators are considering putting the state's insurance commissioner in charge of the study, Nichols says. The NFIB isn't in favor of that idea, partly because Insurance Commissioner Mike Kreidler is up for re-election, and public money would be spent to send him around the state to conduct public meetings about the models, one of which is his own.

"There's a definite merit to studying these plans," Nichols says. "Our big problem is with who they put in charge of the effort."

Premera Blue Cross, which has about 1.3 million members in Washington, including 247,000 in Eastern Washington, also is watching that bill closely, says Jack McRae, a senior vice president for legislative and congressional affairs at the Mountlake Terrace, Wash.-based insurer. While Premera supports studying proposals, it would rather a more neutral party" than Kreidler supervise the study, McRae says.

"Since he created one of the proposals, we feel there could be a bias in the work group if he oversees it," McRae asserts.

Other health-insurance-related proposals this session that Premera opposes include bills that would provide universal or catastrophic coverage and a law that would allow Kreidler to regulate premium rates in the individual health-insurance market, McRae says. Premera expects the latter bill will pass this year. It doesn't expect that the catastrophic and universal coverage bills will pass, but does anticipate that they will be considered more seriously next year.