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Castelli Decries Plan to Drop Small Biz Insurance

Assembly member Robert Castelli (R, C – Goldens Bridge) has asked State Department of Financial Services Superintendent Benjamin Lawsky to empanel an insurance task force in response to the recent news that Empire BlueCross BlueShield will drop small business health insurance plans next year.

The plans cover 20,000 businesses in New York State.

Castelli said the task force’s creation is necessary in order to avert a devastating effect on businesses in Westchester County.

“This move has the potential to short-circuit the small gains we’ve made in terms of economic recovery here in Westchester County by lessening competition and driving up the costs of health insurance for small business owners and employees,” he said.

According to a recent press release from Empire, as of April 1, 2012, the company will eliminate seven of the 13 group plans it offers to small businesses with between two and 50 employees. Castelli is concerned the decision disproportionately affects Westchester County and will lead to higher healthcare insurance premiums from the remaining insurers, which could force local businesses to relocate out of state.

“We can never truly be open for business if we regulate ourselves out of attracting and retaining small businesses via insurance mandates,” Castelli said. “If we want to return to being the business-friendly state we once were, the legislature and the executive branch should convene a task force to address this serious issue before Empire’s recent decision takes effect in 2012. If we act in time, perhaps they will reconsider.”

Billy Fortin, owner of Scotts Corner Market in Pound Ridge said he was surprised by Empire's decision, but noted that small business owners still have other options.

"There are still plenty of other insurance companies out there," he said. "There are alternatives. In fact, we put our [health insurance plan] out to bid every year."

Fortin said his business currently uses the Oxford insurance plan, which offers a three-tiered plan for his employees to choose from.

"I talk to my management team every year about our insurance plan to get their feedback and opinions," he said.

Fortin said he agrees with Castelli's assertion that New York is not as business-friendly as it could be - especially for small businesses who can't always afford the growing number of regulations the state is throwing their way.

"It just keeps getting tougher and tougher and tougher," he said.

Castelli suggested the task force he's proposing could operate in a similar fashion to the governor’s Medicaid Redesign Team, convened earlier this year to examine ways to make the market more affordable and competitive. The group would also examine and recommend the repeal of the numerous coverage mandates created by state law which exacerbated this situation.

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