Last week, we released updates on each of the Partnership's 2009-10 Action Agendas. If you remember, back in September we established a plan for the Partnership's work in each of Buffalo Niagara's five (5) target industry sectors - a "targeted" industry is one that for some reason our region has an advantage and is poised for growth. In Buffalo Niagara, the Partnership and our economic development partners (i.e. ECIDA, Empire State Development, Erie County, City of Buffalo, NYPA) are focused on advanced manufacturing, agribusiness, life sciences, logistics and professional services.
The creation of the agendas was important for a number of reasons...
First, they're member-driven - in putting them together, we reached out to employers in those industries and asked them what role they see the Partnership having in the growth of the industry. Second, they helped delineate the Partnership's work from established organizations representing those industries, to ensure no duplication of services. Third, they enable us to remain focused on a specific set of deliverables for each industry. The process has been a good one, and we are already beginning to prepare the 2010-11 versions of the agendas.
Here are some highlights from the past year (click on the industry itself to link to the full update):
Advanced Manufacturing: An average of over 50 attendees at each of the Partnership's 2009-10 "Green" Manufacturers' Tour Series, and a tremendously successful spring Renewable Energy Series.
Agribusiness: Defeat of the proposed NYS Farmworkers' Bill, which would have allowed farmworkers to unionize and mandate overtime for seasonal workers.
Life Sciences: Creation of the Buffalo Niagara Life Sciences Resource Guide and Directory, which will be released next month, and widely distributed locally, nationally and internationally.
Logistics: Development of marketing materials highlighting the bi-national Buffalo Niagara region's logistics capabilities and translated into five languages (final versions forthcoming in June).
Professional Services: Request for a greater regional emphasis on "Buy Local" resulted in the Partnership successfully lobbying for the addition of local sourcing language related to the awarding of IDA benefits and NYPA's offshore wind project, as well as various Partnership programs throughout the year.
It's been a busy year. If your company is in one of these industries, I urge you to take a look at what we've been doing. If you have input into what next year's agenda should look like, send me an e-mail.
Wednesday, May 26, 2010
Monday, May 17, 2010
Albany is the real bully in NY
Our first thought was how can a bill like the "Anti-Bullying Law" that passed the State Senate late last week have slipped by the Republicans and business-friendly Democrats who are usually on guard for these things. Then we remembered that among the special interests that hold the sceptre in Albany are the trial attorneys.
What the "Anti-Bullying Law" (another one of those well-named pieces of legislation) does is basically open the door for all kinds of frivolous lawsuits against employers, by giving workers who have been "abused" the ability to sue in civil court. Of course, the first question is... "Aren't you supposed to be doing a budget?" but that aside, the bill that's been passed is so onerous that even Assemblywoman Susan John, the Chair of the Assembly Labor Committee and generally the champion of union/worker-related issues, said in the article above that this is a bad idea.
The sentiment expressed in the article is difficult to argue with - that the possibility of extreme penalties will stop the behavior. Big problem is that the "behavior" isn't defined. There's a lot of room for interpretation - particularly when an employee is let go and is looking for underlying reasons why. So, under this legislation, a court will decide. Which means that just about anything an employee doesn't like will be grounds for a lawsuit.
Of course, the easiest way for an employer to avoid a lawsuit under the "Anti-Bullying Law" should it pass is to move out of New York State. Unfortunately, that's also the way for employers to avoid NY's high taxes, overregulation, unstable state government, and willingness to yank away benefits contracted through economic development programs! Turning New York into a business-friendly state starts with not passing NEW legislation that is anti-business.
It's not often that we're spending our time advocating to the Assembly in opposition to something bad that the State Senate passed (it's usually vice-versa), but this demonstrates just how much work we have to do on behalf of the Buffalo Niagara business community.
What the "Anti-Bullying Law" (another one of those well-named pieces of legislation) does is basically open the door for all kinds of frivolous lawsuits against employers, by giving workers who have been "abused" the ability to sue in civil court. Of course, the first question is... "Aren't you supposed to be doing a budget?" but that aside, the bill that's been passed is so onerous that even Assemblywoman Susan John, the Chair of the Assembly Labor Committee and generally the champion of union/worker-related issues, said in the article above that this is a bad idea.
The sentiment expressed in the article is difficult to argue with - that the possibility of extreme penalties will stop the behavior. Big problem is that the "behavior" isn't defined. There's a lot of room for interpretation - particularly when an employee is let go and is looking for underlying reasons why. So, under this legislation, a court will decide. Which means that just about anything an employee doesn't like will be grounds for a lawsuit.
Of course, the easiest way for an employer to avoid a lawsuit under the "Anti-Bullying Law" should it pass is to move out of New York State. Unfortunately, that's also the way for employers to avoid NY's high taxes, overregulation, unstable state government, and willingness to yank away benefits contracted through economic development programs! Turning New York into a business-friendly state starts with not passing NEW legislation that is anti-business.
It's not often that we're spending our time advocating to the Assembly in opposition to something bad that the State Senate passed (it's usually vice-versa), but this demonstrates just how much work we have to do on behalf of the Buffalo Niagara business community.
Wednesday, May 12, 2010
Business Restructuring Symposium
Guest Blog by Tommy M. Onich CTP, Buffalo NY
The Buffalo Niagara Partnership in collaboration with the Turnaround Management Association (TMA) is presenting “Revitalizing American Businesses in Challenging Times” on Wednesday, May 26th from 8:00 A- Noon. This Symposium is targeted to those businesses who feel that they are challenged or even distressed. These businesses face complex and multiple issues that are daunting to many management teams. In such an environment, a turnaround may be possible, however, any mistake or misdirection can result in catastrophe.
TMA will leverage the knowledge of some of the best turnaround/restructuring professionals in the world to assist those businesses that may be facing difficulties.
The program will provide useful and practical information to assist in recovery or revitalization. In a panel discussion and through real life examples, topics covered will include:
• Essential requirements for a turnaround
• Cash flow analysis and management
• A sample of crucial management reports
• Legal aspects of business restructuring
For additional information or to register, visit http://www.thepartnership.org/events
The Buffalo Niagara Partnership in collaboration with the Turnaround Management Association (TMA) is presenting “Revitalizing American Businesses in Challenging Times” on Wednesday, May 26th from 8:00 A- Noon. This Symposium is targeted to those businesses who feel that they are challenged or even distressed. These businesses face complex and multiple issues that are daunting to many management teams. In such an environment, a turnaround may be possible, however, any mistake or misdirection can result in catastrophe.
TMA will leverage the knowledge of some of the best turnaround/restructuring professionals in the world to assist those businesses that may be facing difficulties.
The program will provide useful and practical information to assist in recovery or revitalization. In a panel discussion and through real life examples, topics covered will include:
• Essential requirements for a turnaround
• Cash flow analysis and management
• A sample of crucial management reports
• Legal aspects of business restructuring
For additional information or to register, visit http://www.thepartnership.org/events
Monday, May 10, 2010
Bad decision-making leads to cyclical budgetary problems
Albany's inability to make tough decisions year after year just continue to compound the state's fiscal woes. With certain components of the state's spending untouchable, certain components of the state's spending seemingly untouchable (i.e. public employees salaries and benefits), it becomes the revenue generating pieces of the state's budget that are hacked. New York's economic development programs are in jeopardy, with the Empire Zone program sunsetting on June 30 with no replacement program in sight, and cutbacks in tourism funding will hurt New York's ability to engage other states in one of our historically strongest industries (that, by the way, provides substantial return-on-investment).
State government continues to drive out private sector investment - whether it be business attraction programs that create taxpaying jobs, or visitors to our state spending their discretionary funding in our businesses and contributing to our sales tax revenues - to protect an overblown state government. As Albany suppresses revenue generation, the budget gap will continue to grow. A lot of people will say that you can't treat government like a business - but not spending what you don't have and putting your resources into the more strategic places should not be alien principles to those supposedly watching over our $130-some billion.
Needless to say, we look forward to making some changes in Albany on Election Day, 2010.
State government continues to drive out private sector investment - whether it be business attraction programs that create taxpaying jobs, or visitors to our state spending their discretionary funding in our businesses and contributing to our sales tax revenues - to protect an overblown state government. As Albany suppresses revenue generation, the budget gap will continue to grow. A lot of people will say that you can't treat government like a business - but not spending what you don't have and putting your resources into the more strategic places should not be alien principles to those supposedly watching over our $130-some billion.
Needless to say, we look forward to making some changes in Albany on Election Day, 2010.
Leadership Summit is a Hit!
On Friday, May 7th, the Buffalo Niagara Partnership held a morning program entitled: "Our Local Economy - It's BIG Business!" Our guests represented a wide variety of industries including logistics, manufacturing, health care, engineering and true start-ups. It was one of those instances when everything clicked. There was a nice energy to the room....everything flowed. I had several people tell me after the program that the information was extremely relevant. That's good confirmation for me because the program was developed based on feedback that my colleagues and I get when we meet with companies on a one-to-one basis through our Outreach Program.
It became apparent that our speakers provided a wide variety of paradigms to consider when our local businesses think about how they view their plans for growth.
Our program began with Tom Ulbrich, Executive Director of UB's School of Management, Center for Entrepreneurial Leadership. He did a fine job outlining the trends that are occurring locally and across the State. It's the type of information that becomes very important when you need to assess your business strategy. Tom was followed by Paul Herlan, Director of Business Development for the Brisbane Group, a subsidiary of Lumsden McCormick. He shared an excellent case study of how they approached developing their business opportunities in the New York City area. It's a great story. All the NYC business gets completed by experts employed in Buffalo.
David Griggs, Director of Business Development for the Buffalo Niagara Enterprise, explained the importance of developing an identity and learning about the culture of a new industry or geographic area well before you take the first step. Think about it. There are cultural differences right down the NYS Thruway. Taking business outside the region, state, country and yes, outside of our borders, involves some homework other than spreadsheets and pro formas. Gary Marchiori, President of EnergyMark, LLC provided an insiders look into the growing industry of alternative energy sources and methods that used to access our natural resources.
Larry Singer, President of Captial Asset Funding, provided specific tips on how local companies are able to take advantage of opportunities for selling to the federal government. The Feds are the largest purchasing entity in the country and not many attempt to get on their list. Surprisingly, it's easier than I thought.
A special word of thanks to our speakers for sharing their insights on how we should think about growing our local businesses. Given the dynamic change of our economy in the last 18 months, it's a great time to consider all the opportunities that await our companies that call Buffalo Niagara home.
It became apparent that our speakers provided a wide variety of paradigms to consider when our local businesses think about how they view their plans for growth.
Our program began with Tom Ulbrich, Executive Director of UB's School of Management, Center for Entrepreneurial Leadership. He did a fine job outlining the trends that are occurring locally and across the State. It's the type of information that becomes very important when you need to assess your business strategy. Tom was followed by Paul Herlan, Director of Business Development for the Brisbane Group, a subsidiary of Lumsden McCormick. He shared an excellent case study of how they approached developing their business opportunities in the New York City area. It's a great story. All the NYC business gets completed by experts employed in Buffalo.
David Griggs, Director of Business Development for the Buffalo Niagara Enterprise, explained the importance of developing an identity and learning about the culture of a new industry or geographic area well before you take the first step. Think about it. There are cultural differences right down the NYS Thruway. Taking business outside the region, state, country and yes, outside of our borders, involves some homework other than spreadsheets and pro formas. Gary Marchiori, President of EnergyMark, LLC provided an insiders look into the growing industry of alternative energy sources and methods that used to access our natural resources.
Larry Singer, President of Captial Asset Funding, provided specific tips on how local companies are able to take advantage of opportunities for selling to the federal government. The Feds are the largest purchasing entity in the country and not many attempt to get on their list. Surprisingly, it's easier than I thought.
A special word of thanks to our speakers for sharing their insights on how we should think about growing our local businesses. Given the dynamic change of our economy in the last 18 months, it's a great time to consider all the opportunities that await our companies that call Buffalo Niagara home.
Friday, May 7, 2010
Firefighters sending wrong message
I had the pleasure of attending Mayor Brown's fundraiser last night - very nice event, ran into a lot of old friends from my Buffalo Rocket days. The Partnership has been working closely with the Mayor's office on a number of initiatives, including Canal Side, the Buffalo Niagara Medical Campus, the future of the Buffalo Economic Renaissance Corporation and the Olmsted Parks transition. We've worked hard at creating a good relationship with the Mayor, and feel that he's doing some good things. I'll be attending a public hearing on the the Mayor's proposed budget on Monday, and will be commending his commitment to hold the line on taxes in the City of Buffalo.
A little unsettling on my way into the event was the firefighters' picket line - the firefighters demonstrating for not having a renewed contract for some time. The picket line wasn't really the issue... They're generally present at all of the Mayor's functions - governmental or political (everyone walked through a similar line at the 2010 State of the City address). Not even disconcerting was the fact that they were blocking entrance into the event and shouting things at people going in. Most everyone's been through that before and we in government relations have developed thick skin.
What WAS reprehensible was what they were shouting - while I walked in, one of the firefighters, I'm assuming in an attempt to be witty, said "I don't know who's going to rescue you if you choke on something in there."
Here's the thing with that: I'm not only a government relations person for the Partnership going to an event for the Mayor, I'm a City of Buffalo resident who just heard that if I or my family are in an emergency, the disgruntled union worker collecting a salary off of my tax dollars may or may not come to help. Regardless of where your sympathies lie in the contract debate, no citizen should be made to feel that they can't depend on the people who swore an oath to protect them. That's not to mention that we have a little thing in New York State called the Taylor Law - that we spend a lot of effort trying to get reformed, but that protects public employees providing essential services from the expiration of a contract in exchange for them doing their job. A resident of Buffalo should never have to hear a comment like that. I'm certain I'm not the only one who was told this on the way into the event.
In addition, it just doesn't make good sense politically. What the firefighters need is public support, and that's not going to come by creating a divide with the people of the City that are depending on them. It's unfortunate - even if it is one off-message member of the union speaking out of turn.
A little unsettling on my way into the event was the firefighters' picket line - the firefighters demonstrating for not having a renewed contract for some time. The picket line wasn't really the issue... They're generally present at all of the Mayor's functions - governmental or political (everyone walked through a similar line at the 2010 State of the City address). Not even disconcerting was the fact that they were blocking entrance into the event and shouting things at people going in. Most everyone's been through that before and we in government relations have developed thick skin.
What WAS reprehensible was what they were shouting - while I walked in, one of the firefighters, I'm assuming in an attempt to be witty, said "I don't know who's going to rescue you if you choke on something in there."
Here's the thing with that: I'm not only a government relations person for the Partnership going to an event for the Mayor, I'm a City of Buffalo resident who just heard that if I or my family are in an emergency, the disgruntled union worker collecting a salary off of my tax dollars may or may not come to help. Regardless of where your sympathies lie in the contract debate, no citizen should be made to feel that they can't depend on the people who swore an oath to protect them. That's not to mention that we have a little thing in New York State called the Taylor Law - that we spend a lot of effort trying to get reformed, but that protects public employees providing essential services from the expiration of a contract in exchange for them doing their job. A resident of Buffalo should never have to hear a comment like that. I'm certain I'm not the only one who was told this on the way into the event.
In addition, it just doesn't make good sense politically. What the firefighters need is public support, and that's not going to come by creating a divide with the people of the City that are depending on them. It's unfortunate - even if it is one off-message member of the union speaking out of turn.
Wednesday, May 5, 2010
School Board Election Results
In our first taste of elections in 2010 (the main course comes on Judgment Day in November), we saw some familiar flavors, some fresh faces, and a couple races “too close to call” just yet.
The Partnership got involved in this election for 35,000 reasons. True, the City of Buffalo School District is the second largest district in the state, it is the largest public employer in Buffalo and its near $1 billion budget is twice the size of the City of Buffalo’s. But more importantly, there are 35,000 children enrolled in the Buffalo School District. With an unbalanced School Board budget and a state budget in even more dire condition, the future does not look bright for providing a quality education to those kids. That translates to a rough future for Buffalo, and the city is a driving force in the future success or failure of Western New York.
It was painfully obvious this area needed reform-minded candidates who want to provide a better education for the students, not candidates whose focus was on demanding raises from Albany when the state is looking at a $20 billion deficit. Those candidates were Mary Ruth Kapsiak, Vivian Evans, Rev. Kinzer Pointer, Jason McCarthy, and Phil Lomax.
We provided financial support, assisted in a get-out-the-vote strategy, and coordinated an absentee ballot communication plan. The Partnership had direct contact with over 7,000 City of Buffalo residents, on top of all the campaigning each candidate completed. While it would be overly ambitious to expect a 100% success rate, yesterday’s returns gave us hope that perhaps reform is on its way.
In North District, newcomer Jay McCarthy won overwhelmingly, earning 1197 votes to his main opponent’s 897, a 300 vote victory. A third candidate, who siphoned votes away from both McCarthy and his opponent, totaled 520 votes. McCarthy won with a 45-34-20% respective vote. Impressively, McCarthy even called each absentee ballot recipient personally on top of his normal campaign routine.
In Central District, incumbent Mary Ruth Kapsiak earned 557 votes to her opponent’s 298, a 259 vote advantage for an impressive 64%-34% victory.
In West District, we unfortunately ran a little short with Phil Lomax, who brought a fresh perspective against the current Board President. There are enough absentee ballots to overtake the vote differential, but that won’t be determined until next week.
In Ferry District, Rev. Kinzer Pointer made his case against the incumbent and despite his commitment to the children of the district, the opposition won out.
The spotlight falls squarely on East District, where Vivian Evans holds a 13 vote lead on her challenger. With 263 absentee ballots distributed, Evans’ opponent would need to secure over 56% of the ballots to overcome the differential. This race is too close to call, but Evan’s strong absentee ballot push should keep her in the lead.
All in all, the Partnership’s involvement resulted in (likely) 3 or (possibly) 4 reform minded candidates joining or returning to the Board, which should lead to a majority that will work for the students, stand up to the special interests, and bring about real change within the school district. What happens today in Buffalo schools will have a direct impact on the region's workforce of the future - it behooves us to pay attention and stay involved.
Now that this election is completed, the Partnership will be turning its full attention to Albany, and we have a message for the Assembly members and Senators who are currently ignoring a month-plus late budget:
We are watching you, and Judgment Day is coming.
The Partnership got involved in this election for 35,000 reasons. True, the City of Buffalo School District is the second largest district in the state, it is the largest public employer in Buffalo and its near $1 billion budget is twice the size of the City of Buffalo’s. But more importantly, there are 35,000 children enrolled in the Buffalo School District. With an unbalanced School Board budget and a state budget in even more dire condition, the future does not look bright for providing a quality education to those kids. That translates to a rough future for Buffalo, and the city is a driving force in the future success or failure of Western New York.
It was painfully obvious this area needed reform-minded candidates who want to provide a better education for the students, not candidates whose focus was on demanding raises from Albany when the state is looking at a $20 billion deficit. Those candidates were Mary Ruth Kapsiak, Vivian Evans, Rev. Kinzer Pointer, Jason McCarthy, and Phil Lomax.
We provided financial support, assisted in a get-out-the-vote strategy, and coordinated an absentee ballot communication plan. The Partnership had direct contact with over 7,000 City of Buffalo residents, on top of all the campaigning each candidate completed. While it would be overly ambitious to expect a 100% success rate, yesterday’s returns gave us hope that perhaps reform is on its way.
In North District, newcomer Jay McCarthy won overwhelmingly, earning 1197 votes to his main opponent’s 897, a 300 vote victory. A third candidate, who siphoned votes away from both McCarthy and his opponent, totaled 520 votes. McCarthy won with a 45-34-20% respective vote. Impressively, McCarthy even called each absentee ballot recipient personally on top of his normal campaign routine.
In Central District, incumbent Mary Ruth Kapsiak earned 557 votes to her opponent’s 298, a 259 vote advantage for an impressive 64%-34% victory.
In West District, we unfortunately ran a little short with Phil Lomax, who brought a fresh perspective against the current Board President. There are enough absentee ballots to overtake the vote differential, but that won’t be determined until next week.
In Ferry District, Rev. Kinzer Pointer made his case against the incumbent and despite his commitment to the children of the district, the opposition won out.
The spotlight falls squarely on East District, where Vivian Evans holds a 13 vote lead on her challenger. With 263 absentee ballots distributed, Evans’ opponent would need to secure over 56% of the ballots to overcome the differential. This race is too close to call, but Evan’s strong absentee ballot push should keep her in the lead.
All in all, the Partnership’s involvement resulted in (likely) 3 or (possibly) 4 reform minded candidates joining or returning to the Board, which should lead to a majority that will work for the students, stand up to the special interests, and bring about real change within the school district. What happens today in Buffalo schools will have a direct impact on the region's workforce of the future - it behooves us to pay attention and stay involved.
Now that this election is completed, the Partnership will be turning its full attention to Albany, and we have a message for the Assembly members and Senators who are currently ignoring a month-plus late budget:
We are watching you, and Judgment Day is coming.
Tuesday, May 4, 2010
Guest Blog - Health Insurance Reform: The Strategic Picture
“Is it time to rethink the role of your organization in providing healthcare to employees?”
Allen T. Steinberg, noted ERISA attorney, April 15, 2010.
The new healthcare reform laws – the Patient Protection and Affordable Care Act and the Healthcare and Education Reconciliation Act – contain many provisions, mandates and promises of new regulation that will take effect over the next 4 to 8 years. It is easy to get caught up in the cost of compliance, the risks of cost increases, the timetable of provisions, the penalties and the new administrative burdens. But this may be a good time for you to step back and take a different, more strategic view of the implications of these reforms. Perhaps, it is time for you to delink employment and healthcare and seriously consider separating the financing of health insurance from design and administrative considerations. Your businesses might want to change what healthcare represents as part of your total remuneration package.
Over time, the law will commoditize health insurance – making it more broadly available, defining an “essential health benefits package”, mandating coverage and establishing financial incentives and penalties, and creating government-defined “typical” plans on state-run health insurance exchanges. Taken together, these provisions will make it more difficult for you, as an employer, to differentiate your health insurance coverage from your competitors – either across your industry or those drawing from the same labor pool in your locations – and your health benefits will be less of an inducement to attract and retain employees. In effect, health insurance will become more standardized and more “portable”, thus causing employees to consider whether they should stay in their current jobs because of their health benefits.
One significant result of these changes will be that employers could choose to stop spending hours and days laboring over health insurance designs trying to find that right mix of coverage and costs, looking for the right balance of cost sharing, and worrying that you are under-insuring or over-insuring your employees. Likewise, more standardized plans and a health insurance exchange could reduce your administrative headache, though the new law does require some additional reporting. And this raises the key question posed by Allen T. Steinberg, “What is the role of your organization in sponsoring healthcare insurance, supporting its acquisition and delivering it?”
The answer is that you will be able to uncouple costs from design and administration and yours could be much more of a defined contribution approach to health insurance, similar to the employer’s role in a 401(k) retirement plan. You will simply define your benefits contribution by electing a specific dollar amount to allocate to each employee. Health insurance benefits will become much more of a compensation consideration, than an independent program with increasing costs and huge time obligations for your organization. Defined contribution funding for your healthcare benefits program will actually lower your costs and put you in charge of what you will spend. You will be able to determine an acceptable annual rate of increase and establish a predictable, manageable long-term budget.
Having reduced your cost burden, your next consideration will be to re-examine your entire benefits package. Where the new law addresses only healthcare insurance (and some long-term care features), you have to look at all of the benefits you offer – dental, life, disability, accident/critical illness, wellness, and the like. This will be an excellent opportunity to broaden the scope of the initiative and “reform” your entire benefits package. In fact, the ultimate result of the Act may be to encourage a defined contribution approach to all benefits – a single dollar amount allocation that employees can use to purchase the insurance they need.
This, however, points up one of the limitations of the new law. Its exclusive focus on health insurance may have the effect of uncoupling medical coverage from other benefits, forcing employees to go to different places for their benefits. A better solution will be for you to offer your employees a private exchange that encompasses all benefits – medical coverage that is compliant with the new law along with all the other types of insurance coverage that your employees actually need. This type of benefits exchange will actually release you from the administrative burden you now face. And it will foster a new level of benefits consumerism among employees.
In these ways, the new law will reform not just health insurance but rather the overall picture of benefits – encouraging a defined contribution approach that separates financing from design and administration, makes benefits a compensation consideration, and puts purchasing responsibility in the hands of the benefits user.
Written by Guest Blogger: Alan Cohen, Chief Strategy Officer, Liazon
The reforms, strategies and innovations described here are available to you today in the Bright Choices® program from the Buffalo Niagara Partnership. To learn more, visit the Partnership's Website or attend one of Liazon's webinars, Benefits, A Better Way.
Allen T. Steinberg, noted ERISA attorney, April 15, 2010.
The new healthcare reform laws – the Patient Protection and Affordable Care Act and the Healthcare and Education Reconciliation Act – contain many provisions, mandates and promises of new regulation that will take effect over the next 4 to 8 years. It is easy to get caught up in the cost of compliance, the risks of cost increases, the timetable of provisions, the penalties and the new administrative burdens. But this may be a good time for you to step back and take a different, more strategic view of the implications of these reforms. Perhaps, it is time for you to delink employment and healthcare and seriously consider separating the financing of health insurance from design and administrative considerations. Your businesses might want to change what healthcare represents as part of your total remuneration package.
Over time, the law will commoditize health insurance – making it more broadly available, defining an “essential health benefits package”, mandating coverage and establishing financial incentives and penalties, and creating government-defined “typical” plans on state-run health insurance exchanges. Taken together, these provisions will make it more difficult for you, as an employer, to differentiate your health insurance coverage from your competitors – either across your industry or those drawing from the same labor pool in your locations – and your health benefits will be less of an inducement to attract and retain employees. In effect, health insurance will become more standardized and more “portable”, thus causing employees to consider whether they should stay in their current jobs because of their health benefits.
One significant result of these changes will be that employers could choose to stop spending hours and days laboring over health insurance designs trying to find that right mix of coverage and costs, looking for the right balance of cost sharing, and worrying that you are under-insuring or over-insuring your employees. Likewise, more standardized plans and a health insurance exchange could reduce your administrative headache, though the new law does require some additional reporting. And this raises the key question posed by Allen T. Steinberg, “What is the role of your organization in sponsoring healthcare insurance, supporting its acquisition and delivering it?”
The answer is that you will be able to uncouple costs from design and administration and yours could be much more of a defined contribution approach to health insurance, similar to the employer’s role in a 401(k) retirement plan. You will simply define your benefits contribution by electing a specific dollar amount to allocate to each employee. Health insurance benefits will become much more of a compensation consideration, than an independent program with increasing costs and huge time obligations for your organization. Defined contribution funding for your healthcare benefits program will actually lower your costs and put you in charge of what you will spend. You will be able to determine an acceptable annual rate of increase and establish a predictable, manageable long-term budget.
Having reduced your cost burden, your next consideration will be to re-examine your entire benefits package. Where the new law addresses only healthcare insurance (and some long-term care features), you have to look at all of the benefits you offer – dental, life, disability, accident/critical illness, wellness, and the like. This will be an excellent opportunity to broaden the scope of the initiative and “reform” your entire benefits package. In fact, the ultimate result of the Act may be to encourage a defined contribution approach to all benefits – a single dollar amount allocation that employees can use to purchase the insurance they need.
This, however, points up one of the limitations of the new law. Its exclusive focus on health insurance may have the effect of uncoupling medical coverage from other benefits, forcing employees to go to different places for their benefits. A better solution will be for you to offer your employees a private exchange that encompasses all benefits – medical coverage that is compliant with the new law along with all the other types of insurance coverage that your employees actually need. This type of benefits exchange will actually release you from the administrative burden you now face. And it will foster a new level of benefits consumerism among employees.
In these ways, the new law will reform not just health insurance but rather the overall picture of benefits – encouraging a defined contribution approach that separates financing from design and administration, makes benefits a compensation consideration, and puts purchasing responsibility in the hands of the benefits user.
Written by Guest Blogger: Alan Cohen, Chief Strategy Officer, Liazon
The reforms, strategies and innovations described here are available to you today in the Bright Choices® program from the Buffalo Niagara Partnership. To learn more, visit the Partnership's Website or attend one of Liazon's webinars, Benefits, A Better Way.
Monday, May 3, 2010
Upstate needs to be paying attention!
Ever wonder what motivates elected officials, particularly in Albany? [insert your own joke here] Well, State Senate President Pro Tem Malcolm Smith showed his true colors - and the true colors of downstate Democrats - in some obtrusive comments over the weekend right here in Niagara Falls.
We've been asked a lot in the past few months about why and how we've come to such a hard-line stance in our "Remember in November" political fundraising efforts, having set a specific goal of putting the Republicans back in the majority in the NYS Senate. You need go no further than Malcolm Smith's comments to find the basis of why. Add to it the havoc that the Democrat-only government in Albany has wrought on New York business and personal taxpayers in the past two years, and its no mystery.
With a coalition of Upstate chambers of commerce, we started Unshackle Upstate in 2006 to raise awareness of the fact that decisions made in downstate New York were not always applicable - and sometimes were downright harmful - to Upstate. I believe we've done a good job. We've branded the idea. We've become a private sector policy resource for Albany electeds looking for points-of-view other than their own. We've stopped a lot of awful proposed legislation. And we're had some advocacy victories along the way (i.e. workers' comp, brownfields, historic preservation tax credit).
But now it's time to put up or shut up. Upstate voters must coalesce into a very defensive posture against the Malcolm Smiths of New York, who honestly could not care less about what happens here (how else do you explain the audacity of delivering such a speech IN Upstate?). I urge you to join the Unshackle Army and get ready for November's battle to save Upstate New York.
We're not naive - we all know that redistricting after a census is a tool for holding or gaining political power. But who - particularly in a leadership role - goes around the state saying things like that? Unfortunately, Upstaters can't vote Malcolm Smith out of office... But we can certainly do what we can in our own region.
“With the Democrats in control of the State Senate, we are going to draw the lines so that Republicans will be in oblivion in the state of New York for the next 20 years."That was his quote. We're not talking about overcoming a $20 billion deficit. Or about stemming job losses. Or keeping parks open. Or paying contractors. Or holding taxes at bay. Or reducing government spending. No, downstate Democratic leadership is focused on political manipulation intended to stomp out Republican resistance. And I hate to say this, for all you partisans out there, but stomping out the Republicans means stomping out Upstate's voice in anything.
We've been asked a lot in the past few months about why and how we've come to such a hard-line stance in our "Remember in November" political fundraising efforts, having set a specific goal of putting the Republicans back in the majority in the NYS Senate. You need go no further than Malcolm Smith's comments to find the basis of why. Add to it the havoc that the Democrat-only government in Albany has wrought on New York business and personal taxpayers in the past two years, and its no mystery.
With a coalition of Upstate chambers of commerce, we started Unshackle Upstate in 2006 to raise awareness of the fact that decisions made in downstate New York were not always applicable - and sometimes were downright harmful - to Upstate. I believe we've done a good job. We've branded the idea. We've become a private sector policy resource for Albany electeds looking for points-of-view other than their own. We've stopped a lot of awful proposed legislation. And we're had some advocacy victories along the way (i.e. workers' comp, brownfields, historic preservation tax credit).
But now it's time to put up or shut up. Upstate voters must coalesce into a very defensive posture against the Malcolm Smiths of New York, who honestly could not care less about what happens here (how else do you explain the audacity of delivering such a speech IN Upstate?). I urge you to join the Unshackle Army and get ready for November's battle to save Upstate New York.
We're not naive - we all know that redistricting after a census is a tool for holding or gaining political power. But who - particularly in a leadership role - goes around the state saying things like that? Unfortunately, Upstaters can't vote Malcolm Smith out of office... But we can certainly do what we can in our own region.
Congressman Lee sends some small business insight
Wanted to pass along some information that Congressman Chris Lee shared last week with his Small Business Advisory Board, on which the Partnership sits, regarding tax credits available to small businesses through the health care reform legislation. The Congressman's letter was in response to postcards send by the IRS to small businesses during the week of April 19.
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