New Hampshire is using health care uncertainty to capture Vermont jobs

by Rob Roper

During the floor debate over H.202, the single payer health care bill, Representative Heidi Scheuermann (R-Stowe) expressed concern that uncertainty surrounding future taxes will threaten many existing jobs in the state. Scheuermann shared comments she heard from an economic development corporation that its member businesses are already getting calls from New Hampshire to come across the river and escape what awaits them in Vermont. “This is not a good sign,” said Scheurermann, “and not one we can afford to face over the next three years.”

Although businesses have many concerns regarding H.202, Scheuermann and Rep. Oliver Olsen (R-Jamacia) offered an amendment to deal with one big one – the tax treatment of companies that self-insure under federal ERISA laws.

The threat that has been levied is that such employers and their employees will get hit twice with health care costs, first when they pay for their employees current plans, and then again when they are taxed (Dr. Hsiao’s report called for a combined 14.5% payroll tax) to pay for Green Mountain Care. This would be a crippling financial burden, one that could leave some Vermont employers scrambling to escape.

As one such company explained in a letter to Rep. Scheuermann:

Our company is self insured for medical care in 8 states and includes medical, prescription, dental, and vision coverage. We have plants identical to our Newport, VT, one in Maine, one in Wisconsin, and a plant recently idled in Ontario Canada. Currently the 3 US plants are running at 2/3 capacity. Decisions regarding ramping up any plants’ volume will hinge, in part, one each one’s cost of operation. Adding a payroll tax will certainly impact Newport’s cost of operation compared to our sister mills.

Given that some of Vermont’s current self-insured companies include IBM, GW Plastics. General Electric, General Dynamics, Pizzagalli Construction, BF Goodrich, EHV Weidman, Cabot Cheese, Green Mountain Coffee Roasters, Orvis, The Country Store, Energizer, Plasan, King Arthur Flour, My Web Grocer,, and many more, this is an issue that a legislature focused on creating and retaining jobs would want to resolve quickly.

Scheuermann’s and Olsen’s legislation would have eliminated the threat of health insurance double jeopardy by guaranteeing companies that self insure under federal law an exemption from any state imposed tax to pay for health care.

The amendment failed.

As Rep. Scheuermann concluded. “There has been a great deal of talk about jobs in this body over the last week. This was an opportunity to actually do something for jobs in Vermont an opportunity to give some amount of certainty to our employers throughout the state. Their angst around the financing of a new health care system is palpable. Unfortunately we just ignored that.”