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Archive for Monday, March 8, 2010

Statehouse Live: Insurance proposal considered by committee

March 8, 2010, 11:38 a.m. Updated March 8, 2010, 1:18 p.m.

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— A Republican legislator on Monday said his bill allowing small business owners to offer workers money to buy their own health insurance will increase the number of people with insurance coverage.

State Rep. Arlen Siegfreid, R-Olathe, said he proposed House Bill 2682 because many small businesses are dropping their group policies because the price is too high and businesses are trying to reduce expenses in the current struggling economy.

His bill would allow employers to pay employees a certain amount so that those workers could buy their own plans. The bill would allow a deduction in Kansas adjusted gross income in the amount paid for health insurance premiums.

But Linda Sheppard, with the Kansas Department of Insurance said the bill will actually cause more people to be uninsured.

It will create an incentive for small businesses to drop group plans, throwing many older and less healthy employees into a an insurance market that will either deny them coverage or charge extremely high rates, she said.

“Our concern is you will increase potential coverage for some at the expense of others. Some will gain and some will lose,” Sheppard said.

The Kansas Department of Revenue said the legislation would reduce state revenue by about $108.6 million in the next fiscal year.

The House Taxation Committee took no action on the bill.

Comments

headdoctor 4 years, 1 month ago

Perhaps the bill contains some enforcement that I missed while doing a quick scan of it. I didn't see anything that would force the employee to actually buy the insurance after the money was given to them for it. If not I can see the concern because I would guess that many will just pocket the tax exempt money for living expenses and still be uninsured.

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Ryan Neuhofel 4 years, 1 month ago

While I understand the distinction between group and individual policies, I cannot see how encouraging small business' to contribute to employees health care and/or insurance plans is a bad thing. Many small business simply cannot afford the entirety of a large group 'managed care' policy, but would still like to contribute in some way. This seems to be a reasonable adjustment to the currently biased tax-code.

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