Wednesday, June 30, 2010
But what about routine visits to a doctor, chiropractor, or pediatrician? Most medical insurance plans cover these. And, whether or not you go to the doctor regularly, the premium you’re paying assumes you do. The average person has about $1,000 a year in medical expenses, but is paying as much as $5,000 or more a year for medical coverage. A lot of that difference, you’re paying “just in case”: the insurance company holds it in reserve in case you get very sick or have a bad accident and incur higher than expected medical expenses.
Wouldn’t it make more sense to apply the “unpredictable and expensive” rule here? Let the insurance company worry about that. You would take on a lower premium and put the money you save into your own reserve account to have cash to cover your routine medical costs yourself. There is medical insurance that let you do this. It’s called a consumer-driven healthcare plan, or CDH plan. A CDH plan gives healthcare “consumers,” that is, employees and their families, more control over healthcare costs and how their medical dollars are spent.
In a CDH plan, employees pay a lower premium, so less money comes out of pay. Now, of course, there’s no free lunch, so with the lower premium there’s a higher deductible before the benefits kick in.
To help cover this deductible, and to save for future health expenses, the CDH plan comes with a Health Savings Account (HSA). So, the employee takes some of the money they’re no longer spending on the insurance premium, and puts it into the HSA. Some employers even put some money into each employee’s HSA to help them get started. But this is the employee’s account; they own the money in it. It carries over from year to year. It goes with them if you leave the company. Over the years, many people will be able to build the HSA into a large account. It’s like a 401k for healthcare.
Like a 401k, the money going into an HSA is pre-tax, that is, there is no income tax on it. Now, of course, there’s an annual limit to how much can be put in pre-tax. But as long as the money in the account is spent on allowable medical expenses, there’s never any income tax on it. And the money is in an interest-bearing checking account, so it grows a little bit. And when the balance reaches a certain level, the employee can actually start to put the money into investment funds so the account can grow even faster. And there are no taxes on what is earned. So, an HSA is TRIPLE tax-free. It goes in pre-tax, it grows tax-free and it comes out to pay healthcare expenses tax-free. It is just about the best way to avoid the tax man out there. If an employee does take some out for other purposes, they will owe taxes, plus a 20 percent penalty.
So, employees accumulate money in their HSAs and then use this cash reserve to pay for routine medical expenses until they’ve satisfied their deductible and the coverage kicks in. But they’re not on their own, because with a CDH plan they’re still members of a medical plan. So even when they’re spending their money, they get services at the lower rates that the insurance company has negotiated with the doctors, hospitals, pharmacies and others.
The idea of a CDH plan is that employees hold onto some of their own money and use it for some of their medical expenses . . . with a safety net should something unpredictable and expensive happen. So, it’s in their interest to be a good health care consumer -- to check medical bills, to compare treatment options and costs, and to consider the urgency and frequency of doctor appointments. It’s called consumer-driven health care because the consumer is driving it. So . . . that deer had better watch out.
The consumer driven healthcare and HSA strategy described here are an integral part of the Bright Choices® program from the Buffalo Niagara Partnership. To learn more, visit www.thepartnership.org/insurance or call Fred Bristol at 541-1729.
This blog was written by Fred Bristol, Buffalo Niagara Partnership.
Tuesday, June 29, 2010
One glaring omission from the legislature's budget is the Public Higher Education Empowerment and Reinvestment Act (PHEEIA), UB2020 or any of its variations. The Upstate/Downstate divide continues - with New York City legislators (including Assembly Speaker Sheldon Silver) painting the program as making higher education unaffordable for the public. It's a further delineation that Downstate-centric leadership has no clue as to what the Upstate economy needs (and even greater reason why we need to do everything we can on Election Day to ensure that Upstate is better represented in 2011).
Though UB2020 was not included in the budget, Governor Paterson continues to push it, and that's giving it a breath of life. We continue to advocate on our end. It ain't over 'til it's over.
More Upstate/Downstate issues:
- Legislators late yesterday included a provision in the budget that would count prisoners as residents of their last known address, rather than of the prison in which they're being held. Obviously, this is a power play to further skew redistricting toward Downstate interests by artificially increasing Downstate population (while decreasing ours). Nice, huh?
- The governor's proposal to defer state economic development tax credits is still alive, though the details are in motion. The last proposal, which would affect any companies that have received tax credits through programs such as the Brownfields Cleanup Program, Green Jobs or Historic Rehab is a deferral of any tax credits earned over $2MM for three years, with the company made whole by 2015. Upstate employers are the prime beneficiaries of these benefits, and business plans have been developed around the contracts signed. If these deferrals pass as part of the legislature's revenue bill (about to be introduced today), it will be a clear indication to employers looking to create jobs in Upstate New York that the state is closed for business.
- This is all in addition to the diminution of the Empire Zone program while film industry tax credit (which pretty much benefits out-of-state companies doing business in NYC) is not held firm, but increased!
Angry yet? If you are, come vent at a fundraiser we're throwing for Assemblyman Jack Quinn tomorrow evening at Pettibones in Coca-Cola Field - part of the overall plan to put Upstate back on the map.
Friday, June 25, 2010
An Evening with Assemblyman Quinn
The Partnership significantly has stepped up the state political action component of our advocacy initiatives, because – along with our business organization partners across the state – we believe the only way Albany electeds will pay serious attention to business issues is to threaten their jobs.
In 2010, that threat has the best chance of being successful by political action to return the majority of the state senate to Republican and thus an upstate balance, away from its current overwhelmingly NYC-centric Democrat leadership.
In this context, and because Assemblyman Jack Quinn III has been one of the most savvy and effective representatives of the Buffalo Niagara employer community, the Partnership is actively supporting his campaign for the NYS Senate.
On Wednesday, June 30th, from 6-8 pm, the Partnership is hosting a fundraiser for Assemblyman Quinn at Pettibone’s Grille, 275 Washington Street in Buffalo. Cost per person is $99 with sponsorships available. Please make checks payable to Quinn for N.Y., c/o the Buffalo Niagara Partnership, 665 Main St. Suite 200, Buffalo, NY 14203. Feel free to contact A.J. Wright to RSVP or with any questions.
Congressional Briefing Series with Congressman Brian Higgins
Please join Congressman Higgins and the Partnership on Thursday, July 8th at 12 noon in the Partnership’s Knox Room* (complimentary lunch will be served) as we discuss federal issues facing the Buffalo Niagara region. The format will include brief comments from Congressman Higgins followed by a question and answer period. This setting ensures a prime opportunity to connect with one of our region’s Federal representatives. Click here to register.
*May move to Smith Theatre (Shea’s) due to high turnout
Congressional Briefing Series with U.S. Senator Charles Schumer
This was just confirmed and the Partnership is very excited to have Senator Schumer visit us again this summer. On Monday, July 19th, from 8:30 - 10 am, at the Partnership, please join us in welcoming Sen. Schumer as we discuss federal issues facing the Buffalo Niagara region. As one of the Senate’s most influential members, Sen. Schumer will provide great insight into what will be on the federal government’s docket the rest of the year. The format will include brief comments from Sen. Schumer followed by a question and answer period. Click here to register.
Hope to see you there!
Thursday, June 24, 2010
It’s important for all of us: residents, developers, planners, not-for-profits and elected officials to take the responsibility for understanding how we think about our community’s vision for the future. In essence, we all have a vested interest in how we best utilize the strength of our resources to enhance the strength of our region. Think about it. We can define resources as roads, sewers, schools, hospitals, businesses, colleges and universities, homes, parks, people, cultural institutions, financial capital, human capital… the list is nearly endless. The Framework provides an intelligent strategy for how we are best able to maximize these resources without adding to the tax burden of our area residents.
The Framework is the result of collaboration between the counties of Erie and Niagara to make intelligent use of our resources. It affords the opportunity for each municipality to capitalize on their unique core competencies while also enhancing our larger community. Think of it as a mosaic. Each unique piece plays an important role in the creation of the larger picture. You can’t have one without the other.
Please “stay tuned” for more updates on the Framework and to learn how you can become more informed and/or involved in our efforts.
Monday, June 21, 2010
Now, there have been complaints over time about the generosity of the Empire Zone program. Is it perfect? No, we don't think so - in fact, we've advocated for reform of the program for a while. We'd love to see a program that focuses more on return-on-investment to the community (meaning stimulating jobs and private sector investment) than simply where companies locate and sheer job numbers. But it's what we have for now - and, importantly, Upstate New York needs programs offering economic development incentives to mitigate the high cost of doing business inflicted on us by Albany.
But... We also understand that we're in the midst of the budget crisis. Governor Paterson has said many times that everyone must "share the pain." We know that could include economic development programs. So let's start sharing.
Hold on, though. When we think of "sharing the pain," we think of everyone pitching in. Yet, while Albany seems willing to take the extremely shortsighted approach of cutting back job-creating programs, it has been wholly unwilling to cut the size and cost of government. Layoffs? No. Furloughs? No. Medicaid reform? Nope. Cuts in state operations? Negative. Consolidation of agencies? Nyet.
But wait, there's more... Apparently "sharing the pain" means taking economic development funds from Upstate and giving them to New York City. In the same proposal to cut the size and scope of the Empire Zone program, MORE funding will be invested through the NY Film Tax Credit, which almost exclusively benefits NYC (with a 1:1 benefit-to-cost ratio, by the way, as opposed to Empire Zone's 35-1).
So, it's clear that "sharing the pain" in reality means biting further into the private sector to help the state justify its overspending. We are opposing this approach. New York's economic development programs were developed as a way around the high costs of doing business - you can't cut them without commensurate cuts in the difficulties that Albany presents those trying to do business in Upstate.
Friday, June 18, 2010
The Buffalo Niagara 360 program successfully ended its 2nd year of programming June 17th at the Castellani Art Museum. Event sponsor Niagara University was eager to provide students and staff the opportunity to network and learn from a wide range of execs from the for-profit and non-profits fields and to show off its beautiful campus. It was BN360’s first foray into Niagara County and what better venue to hold it than the Castellani Art Museum.
Attendees mingled in the main hall and were encouraged to explore the exhibits while enjoying “networking-friendly” hors d’ourves. Etiquette consultant John Bourdage, who has worked with NU’s staff and students for the past 15 years, provided an overview of proper networking techniques and strategies. Some key points included perfecting and tailoring your elevator pitch to the right crowd, seeking out 2-3 quality connections versus a multitude of shallow ones, and using good judgment when consuming beverages and food (pick smaller pieces of food instead of messy chicken wings and enjoy your wine after you have accomplished a majority of your networking).
John provided a great refresher for both students and execs alike. The execs were stationed in specific corners around the room in order to provide guests with as much opportunity to network as possible. It was generally agreed that guests followed John’s networking advice – many engaged in fewer, quality conversations throughout the evening.
Thanks again to our sponsor Niagara University for supporting and hosting Execs Unplugged, as well as to our participating execs:
- Alicia Bartsch, Director of Community Relations, Big Brothers Big Sisters of Erie County
- Tony Borowicz, VP of Finance, QiG Group
- Carol Cassell, Director, P2 Collaborative of WNY
- Merry R. Constantino, Principal, ProductLogic
- Joan Graci, President, APA Solutions
- Kevin Kelly, President, I Evolve Technology Services
- Larry Montani, Managing Director, Niacet Corporation
- Lou Panzica, President & CEO, Power Drives, Inc.
- Nancy J. Parisi, Social Documentation
- Chris Schoepflin, President, USA Niagara Development Corporation
- Bernie Switzer, President, Precision Photo-Fab, Inc.
Thursday, June 17, 2010
Increased competition, as well as volatile financial markets and economic trends, have created a climate where no business can take stability for granted. That's why the Buffalo Niagara Partnership and the Upstate Chapter of the Turnaround Management Association are presenting a Business Restructuring Symposium on June 29th from 8:00 AM - Noon. The Turnaround Management Association is the only International non-profit association dedicated to corporate renewal and turnaround management.
The symposium, which will be held at the Buffalo Niagara Partnership's offices, will focus on key areas of turnaround management including: 13 week cash flow analysis, cash flow management, the current credit market and business restructuring.
This symposium is a don't miss for companies who are thinking about restructuring and who think they may need to revisit their current business practices.
Check out the Partnership's website for more information or to register for the event ... www.thepartnership.org/events
Wednesday, June 16, 2010
The committee's action came after a flurry of activity by the Partnership and our statewide partners. Locally, staff reached out to Assemblymen Hoyt and Gabryszak, both of whom sit on the Local Governments Committee, and their staff, about how important it is that this bill not proceed. Assemblyman Hoyt, the sponsor of the bill AND Chairman of the Local Governments Committee, ultimately made the decision to pull his bill.
If Assemblyman Hoyt really wants to reform IDAs statewide, the Partnership continues to encourage our delegation to implement the Erie County IDA and five town IDAs in Erie County's system of "tiered incentives" for the distribution of economic development benefits. The "tiers" take into account the parameters that our community has identified as being most essential to the overall growth of our regional economy -inclusion in a targeted industry cluster, adherence to the Framework for Regional Growth, preference for local sourcing, and "green" operations. This system, implemented statewide, would guarantee that projects that accomplish the IDA's mission of new jobs, private sector investment and positive community impact receive the appropriate aid from the IDA. That would be true IDA reform.
Tuesday, June 15, 2010
Read Dr. Cropp's recount of the trip to Washington in this month's Expert Forum, which is the second in a three part series discussing Independent Health's position with the local business community and it's larger role in the restucturing of health care.
Monday, June 14, 2010
We held a panel discussion a couple weeks back as part of our Movers & Shakers series on the topic "NYS Political Landscape 2010." As we've discussed many times here in this blog, the Partnership - through our political action committee, the Committee for Economic Growth - has laid out our political action agenda pretty succinctly for 2010: return the Republicans to the State Senate Majority for 2011. A question at the Movers & Shakers - and one we occasionally get in regular conversation - is how can the Partnership be so partisan?
Good question, because it may seem like a new thing, but the answer is simple: we're not. It's not about partisanship - it's about ensuring that Upstate has a chance.
On one hand, our modus operandi boils down to redistricting. The census is currently being taken, and next year state government will redraw the lines that determine who our representatives will be. If the Downstate-heavy Democrat Senate Majority is maintained, exclusively New York City leadership will control the redistricting. That means that Upstate would get the short end of the political stick, with repercussions that could last for decades. We would surely lose Congressional representation, we would see districts drawn with the sole intent of maintaining Downstate political power, and we would be strategically underrepresented. Regardless of what political affiliation you checked on your voter registration, it is not in Upstate's best interest to maintain the status quo in the state legislature.
That's been the primary reason all along, but the question about why we're doing what we're doing has been getting easier every day. With budget negotiations languishing, Albany has become a feeding ground for special interests, and some of the worst pieces of legislation we've seen are surfacing:
- Last week, the State Legislature passed legislation restoring "prior approval" of health insurance rates to the State Department of Insurance. This policy was a disaster last time it was in effect, as it makes health insurance rates accountable to state politics, rather than the market.
- The State Senate recently passed legislation that would mandate utility companies to pay prevailing wage to all of its contractors and their subcontractors - with felony charges for reporting errors! Estimates are that this legislation would cost in excess of $50 million for utility companies to implement, which would be tacked onto already the 2nd highest energy costs in the nation.
- This week (Wednesday), the Assembly's Local Governments Committee will take up the deleterious Hoyt/Thompson IDA "reform" bill, which would enforce wage mandates on any companies receiving benefits through the IDA. We've been fighting this one for a number of years because the increased costs (Center for Governmental Research estimates that in Upstate New York prevailing wage adds 28% onto the cost of a project) heavily outweigh the benefits (typically 10-15%), so the legislation would essentially put the IDAs out of business. We're a fan of the IDAs and how they help mitigate Albany's tax and regulatory burden on Upstate to bring in new private sector investment and create jobs, so this one has to be stopped.
Last week, Unshackle Upstate and a coalition of Upstate business organizations held a press conference highlighting our opposition for what we called the "Dirty Dozen" - 12 bills in front of the state legislature right that will have dire repercussions on job creation in Upstate. It's just one bill after another and it's clear the only way to get it to stop is to make a change in the voting booth. That's why our campaign is called "Remember in November." I hope you'll join us.
Wednesday, June 2, 2010
The options are just not all that good. Trying to find a single plan that covers the diverse needs of disparate employees is an exercise in futility. Shooting for the middle and finding exactly the right balance simply means that half of your employees are under-insured and half are over-insured. How can that be considered a successful business decision? And everyone who has to make it knows that this result of hours and days of investigation is inherently wrong.
Plus, you have to pay more and more each year for the privilege of putting yourself through this exercise in futility. Call it rate increase, the annual “trend”, premium inflation, whatever the term, paying more money for benefits has become the name of the game. Some unfortunate employers are facing increases of 70% or more.
This situation raises two very important points:
Most people in business today did not set out to become benefits experts. You see yourself as an entrepreneur, owner, manager, the “finance guy”. And even those who are pursuing an HR career didn’t set out to deal with the pain of employee benefits. You want to deal with more strategic issue like staffing, compensation and the like.
The vast majority of employers have given up on finding a solution to this problem. They are no longer confronting it and trying to solve it, but instead are looking for a “work-around”. They may shift costs to employees, cut back on benefits altogether, even lay people off to reduce expenses, but these tactics only address the pain, but not the underlying problem, and in most cases they create more pain.
But there is a real solution to this situation . . . defined contribution. Imagine, you can set a long-term benefits budget and determine what you’re going to spend on benefits – an amount that your business can afford. You treat benefits the same way you handle every other business expense. And then, you allocate a certain amount for each employee to spend on their benefits. It really has nothing to do with benefits anymore, it’s a compensation decision. You’ve defined what you’re going to contribute for benefits each year and gotten yourself out of the spiraling cost increases. As with any budget item, you can build in a reasonable inflation rate of your choosing, perhaps 5 percent a year.
But what about your employees? How are they going to use the allocation you’ve given them to buy the insurance they actually need? The answer is simple, you give them access to a marketplace of benefits – a Benefits Exchange – where they have a range of options for different insurance products and they can buy the benefits that are right for them. This is more than the healthcare insurance exchange that is part of the new reforms, because it deals with far more than just medical insurance. There might be 8 medical plans on the Exchange, or 18, or 28. And then there are also all the other benefits an employee might actually want – dental, vision, life, disability, long-term care, accident, critical illness and so on. Each employee decides what he or she needs. They insure themselves, just as they insure their car and house.
This defined contribution approach to benefits is a real solution, not a work-around. It doesn’t just change the way you pay, it relieves your frustration. And it makes your employees happier. Survey after survey shows that when they are empowered in this way and can buy the benefits they actually need, employees are more aware of and satisfied with their benefits and happier in their jobs.
And speaking of reform, many of the experts have suggested the new law will encourage a defined contribution approach to benefits that separates financing from plan design and administration. Benefits become more logically a compensation decision, and employees, not companies, buy benefits.
Written by guest blogger Fred Bristol, Buffalo Niagara Partnership
The defined contribution strategies and the Benefits Exchange described here are available to you today in the Bright Choices® program from the Buffalo Niagara Partnership. To learn more, visit www.thepartnership.org/insurance.
Already, New Yorkers pay the highest energy bills in the nation - with state taxes and assessments accounting for 26 percent of the average energy bill. This new mandate would add an estimated additional $18 million onto our already unaffordable energy costs.
With the budget in flux, the time for special interests-driven deals to be made is now. This isn't the last bad bill we expect to see. We'll continue to monitor and oppose this bill as it comes before the Assembly (where it's expected to not have much trouble getting through) and for a veto by Governor Paterson, if necessary.
Tired of Albany having its hand in your pocket? Join the Unshackle Army. With every bad decision that Albany makes, our grassroots opposition must grow!