South Carolina General Assembly
110th Session, 1993-1994

Bill 1448

Indicates Matter Stricken
Indicates New Matter

                    Current Status

Introducing Body:               Senate
Bill Number:                    1448
Primary Sponsor:                Wilson
Type of Legislation:            SR
Subject:                        Health care reform, employer
Date Bill Passed both Bodies:   19940602    
Computer Document Number:       JIC/6141HTC.94
Introduced Date:                19940601    
Last History Body:              Senate
Last History Date:              19940602    
Last History Type:              Adopted
Scope of Legislation:           Statewide
All Sponsors:                   Wilson
Type of Legislation:            Senate


Bill  Body    Date          Action Description              CMN  Leg Involved
____  ______  ____________  ______________________________  ___  ____________

1448  Senate  19940602      Adopted
1448  Senate  19940602      Recalled from Committee         06
1448  Senate  19940601      Introduced, referred to         06

View additional legislative information at the LPITS web site.

(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)



Whereas, under President Clinton's health care reform proposal, all employers would be required to provide health care coverage to their employees; and

Whereas, Title I of the Health Security Act would require employers to pay for eighty percent of a comprehensive set of health care benefits for all employees, including Medicare recipients, and prorated payments for part-time and seasonal workers; and

Whereas, such employer mandates would result in job loss, a reduction in profits and productivity for American business in general, and small business in particular, and result in higher prices for consumers and lower wages for workers; and

Whereas, small business owners justifiably fear these employer mandates will be utilized to fund an entitlement created, managed, and regulated by the federal government, no different from Social Security, Medicare, Medicaid, or Unemployment Insurance; and

Whereas, such employer mandates have every characteristic of the kind of mandatory payment that is most damaging to small business and the jobs it creates: it is, in fact, a payroll tax; and

Whereas, almost all employers would be required to fulfill this obligation by paying a specific percentage of payroll to a regional health alliance; these mandatory payroll-based premiums constitute a huge, new payroll tax to pay for sixty percent of the proposed new health care system; and

Whereas, a national health board would have the unchecked power to increase at any time the percentage of payroll required to be paid by employers to the regional health alliance; and

Whereas, this payroll tax would be particularly injurious to new businesses, which create one in three new jobs in the United States because the tax mandates an additional fixed cost on those businesses every time they want to grow and hire new employees; and

Whereas, payroll taxes assessed to pay for mandatory benefits also impose upon small business owners a new cost over which they have no control, thus limiting their ability to provide the best possible compensation package for each individual business's survival and its employees; and

Whereas, employer mandates would also impose upon employers a wave of paperwork to be submitted to regional alliances to prove compliance with the law and to calculate payments; such massive amounts of paperwork and the cost associated with it would, in essence, be a hidden tax on employers; and

Whereas, because most small businesses are labor intensive, particularly in the retail and service sector, small firms are disproportionately damaged by a payroll-based tax; a payroll tax also acts as a disincentive for maintaining existing employees; and

Whereas, while small business in general would be adversely affected by employer mandates, small businesses owned by minorities and women would be affected to an even greater extent because these firms tend to be the smallest of our businesses; and

Whereas, based on data from the Census Bureau, the Congressional Budget Office, and other reliable sources, sixty percent of employers in the United States have fewer than five employees, accounting for three million of our employers; of this group, seventy-four percent do not provide health care insurance for their employees; and

Whereas, employer mandates preclude a health care reform approach that makes it possible for these small businesses to respond to a reformed health care insurance market; instead, it immediately and disproportionately raises the payroll costs of these businesses by 3.5 percent to 7.9 percent of payroll, and ultimately makes them responsible for eighty percent of a very rich standard health care standard benefits package; and

Whereas, there exists near unanimity of opinion among the American people, congressional leaders, economists, and even proponents in the White House that employer mandates would result in job loss and prove damaging to small business; and

Whereas, sixty-four percent of Americans are concerned that the Health Security Act will cause employers to eliminate jobs, and seventy-three percent of Americans believe the plan would be injurious to small business; and

Whereas, the Council of Economic Advisors has acknowledged that six hundred thousand jobs could be lost under the President's plan; the small business subsidy plan is in and of itself an acknowledgement of the burden that would be placed on small firms by employer mandates; and

Whereas, a one thousand member survey of the American Economics Association in June, 1993, indicated that eighty percent of the economists interviewed projected a decrease in employment among all employees as the result of requiring employers to provide health care benefits to low-wage employees; and

Whereas, another study conducted by the Employment Policies Institute in March, 1994, concluded that requiring employers to pay for workers' health care insurance expenses would increase labor costs, leading to the loss of 2.1 million jobs; and

Whereas, a Consad Research Corporation study found that three leading health care reform plans requiring employer mandates would affect 7.5 million to 18 million jobs in terms of reduced wages, reduction of other benefits, and potential cuts in hours worked; job loss estimates ranged from four hundred thousand to over one million. Now, therefore,

Be it resolved by the Senate:

That this body memorializes the President of the United States and the Congress of the United States to refrain from including employer mandates as part of any health care reform legislation. Be it further resolved, that it is the sense of the Senate that any federal health care reform enacted into law shall:

(1) preserve the right of all Americans to choose to maintain their existing health insurance policy;

(2) preserve the right of all Americans to choose their own doctors and medical service providers;

(3) preserve the right of all Americans to finance their choice of doctors and medical service providers through private health insurance by making participation in an alliance, cooperative, collective, or any other purchasing entity strictly voluntary; and

(4) guarantee nondiscriminatory tax treatment for the purchase of private health insurance no different than the tax treatment which might be provided to those who purchase health insurance through a government-controlled alliance, cooperative, collective, or any other arrangement.

Be it further resolved that a copy of this resolution be forwarded to the President of the United States, the Speaker of the United States House of Representatives, the President of the United States Senate, and each member of this state's congressional delegation.