Major Vermont employers voice opposition to proposed healthcare plan

by Angela Chagnon

The Senate Health & Welfare committee held a hearing Wednesday night to hear from Vermont’s business community about H.202, the health care reform bill recently passed by the House. They got an earful. The state’s largest private employer, IBM, and a burlington business often referred to when discussing Vermont’s economic future,, expressed detailed opposition to the bill.

“The healthcare reform Vermont proposes has to be fully vetted and have a very high probability of success,” remarked John O’Kane, IBM’s Manager of Government Programs for Vermont. “We cannot ask Vermonters and employers to be ‘test subjects’ for a ‘grand experiment’.”

“IBM strongly opposes H.202,” he stated emphatically. “The bill’s failure to respect multi-state employer exemptions under ERISA threatens our ability to offer uniform benefits to all our U.S. employees.”

O’Kane said that IBM was “disappointed that significant large employer concerns about maintaining existing health benefits design and funding flexibility were not incorporated in prior legislative action on this bill.” He remarked that asking IBM to trust that the proposed healthcare plan would lower healthcare costs and “achieve better health outcomes for employers like IBM than we can accomplish for ourselves” was a “significant risk” for IBM to take.

“IBM strongly supports healthcare reform,” O’Kane continued. He outlined the need to make changes to bring costs down and deal with coverage for the uninsured. “However, effectively dismantling employer provided healthcare benefits just doesn’t make sense, and that is what this bill proposes.”

O’Kane’s testimony included several suggested changes and additions to the bill, mostly about protecting ERISA and preventing large companies from being double-taxed via H.202’s proposed payroll tax. Also submitted in the testimony were several questions regarding the plan’s financial aspects and what the healthcare plan will consist of for individuals and providers.

In summary, O’Kane requested legislators to “clarify that Vermont will respect all ERISA exemptions to that employers offering health insurance will be able to continue doing so and have the flexibility to meet employee needs in and outside of any one state.”

He went on to say that the only way for companies to “exist and provide jobs” was to “maintain competitive costs.”

“Adding significant taxes to these companies will not make Vermont employers more competitive in the global economy,” said O’Kane. “Bringing health care costs down will.”

Lastly, O’Kane advised against rushing the bill through. “Complete top to bottom system transformation at an accelerated pace is daunting and carries great risk.”

After O’Kane finished, two company officials from in South Burlington also testified – Kristen Halpin, Chief Talent Officer and Mike Lane, Chief Operating Officer.

After outlining the amount of business brings to Vermont and how the company ensures that its employees’ healthcare needs are well taken care of, Halpin said that their business practice was to hire companies that “want to know the rules, be able to explain why they are doing the things they are doing, and should know how the resources are allocated.” She said that she was not able to answer those questions about H.202.

“If I go to one of my customers and say, ‘I have an idea’, take concepts and put it toward them, and basically say, ‘it’s going to potentially cost something’ — I can’t sell them that, because I can’t articulate what that looks like,” remarked Lane. “My board is not going to let me build that product or invest in that unless I can actually answer these questions, and show a model that’s actually going to work and succeed. We’re afraid that going down the road we are right now, we’re just setting up for failure. And there’s too much risk involved in this that’s failed too many times before for us to just fall into the same kind of thing.”

“We can’t give our customers products that are half developed, because they won’t take it,” Halpin reiterated. “We’re not saying we can’t do this, what we’re saying is let’s sit back and answer questions just like we do with our customers.”

“We’re providing so many jobs for Vermonters, that we want to be sure we can maintain that,” continued Halpin. “So we’re just asking that you help us answer these questions before we take such a large step because it can be very beneficial to do it right.”

Halpin concluded: “We’re trying so hard to keep our business here. We could easily say, ‘Wow, we’ve got a hundred resumes from California overnight, we can fill all our jobs.’ But we don’t. We’re making extra effort to do everything we can to hire in Vermont and bring people here.”