Employment Law Council Policy Review
September Edition 2008
General Assembly Approves Governor’s Plan to Expand Social Obligation of Small Business to Provide Healthcare
In a surprise move, the General Assembly approved an amendatory veto (AV) to HB 5285 that requires health insurance coverage for unmarried dependents up to age 26 and if a veteran up to age 30. This issue is one facet of the Governor’s plan to expand healthcare coverage. It requires that an employer provide the higher age coverage if dependent coverage is provided to its workforce. An employer is not required to provide dependent coverage nor pay any of the dependent premium. But, the most egregious provision of the Governor’s AV is the provision that does not require any creditable coverage for the dependent. In other words, no pre-existing exclusion is applied. This is like a homeowner waiting until the house catches on fire to buy homeowners insurance.
The Illinois House vote was 70-21. Seventeen House republicans joined all 53 democrats in attendance to send the amendatory veto over to the Senate. The Senate approved the measure 35-17-1. Three GOP senators (Sen. Larry Bomke-Springfield; Sen. John Jones, Mt. Vernon; Sen Carol Pankau-Bloomingdale) joined 32 democrats in approving the measure. Two Democrats voted “no”, Sen. Bill Haine (Alton) and Sen. Linda Holmes (Aurora).
While there are certainly valid reasons that raise questions as to the public policy value of the proposal, the AV is questionable also as to its constitutionality. Illinois is one of the few states that provides their Governor an amendatory veto pen. But the courts have provided limits on that power. In this instance the original, underlying bill expanded coverage to dependents. It allowed full-time college students to extend their dependent coverage by one year if they were injured or sick and left school as full-time student. The Governor’s addition is clearly related to the original legislation, but the question is whether the courts will allow such a drastic change. The language added by the Governor was never debated or voted on in either chamber of the legislature. In fact, bills introduced that dealt with this issue never were able to advance out of any committee in the Senate or House. If changes of this magnitude are allowed to be made by the executive branch one questions the need of the legislative process. The Illinois Chamber should consider legal options to challenge the constitutionality of enactment of HB 5285.
The unintended consequence of HB 5285 becoming law is that access to care for young adults in Illinois will actually diminish. As costs increase, employers will seek to mitigate their costs and avoid this requirement entirely. How? First, this will drive more employers to try self-insurance. Second, more employers will either discontinue to provide dependent coverage or will alter their plans like some already do and charge more premium if the employee has multiple children on the plan.
Autism Health Mandate Advances Again
During the General Assembly’s recent two weeks in Springfield, two different measures were amended to attempt to pass a mandate for autism coverage. Sen. James DeLeo (D-Chicago) amended HB 415, adding provisions identical to SB 1900 which will require group and individual insurance policies to provide up to $36,000 of coverage for a wide range of services and providers to treat children with autism spectrum disorders. The Chamber continues to ask for an amendment to allow employers of 50 and fewer employees an option to purchase this coverage, but the language was not provided in HB 415. The legislation now goes back to the House for concurrence. SB 1900 was held in the Senate due to the Speaker’s rules amendment. HB 415 does not have the Speaker’s rules language.
Not to be outdone, the Governor amenditorily vetoed HB 4255 sponsored by Rep. Bob Pritchard (R-DeKalb) and Sen. Link, adding SB 1900 to the legislation. The legislation will go back to the House Rules Committee to determine whether it meets the constitutional latitude granted to the Governor.
The Chamber is very concerned that mandates are driving the cost of healthcare insurance such that employers are no longer able to afford it. Recent data indicates that Illinois leads the nation in the number of businesses that have dropped health insurance benefits for its employees. While mandates such as this one have merit, they come with a cost…no health benefits for some.
Independent Contractor Rule Finalized
The Joint Committee on Administrative Rules (JCAR) advanced the Illinois Department of Labor’s changes to a proposed rule to implement the Employee Classification Act that went into effect on January 1, 2008. A number of changes recommended to IDOL by the Council were included in the proposed changes to the rules. The rule with changes approved by JCAR will become the adopted, final rule.
Of particular importance, IDOL agreed to bolster two opportunities for contractors to provide additional information to IDOL, one at the outset of an investigation, the other just before a formal charge is filed. The Council in its comments to IDOL and JCAR raised concerns of the lack of due process for contractors. These changes are helpful, however they fall far short of formal hearings as we had recommended.
Finally, IDOL agreed to consult with affected organizations between now and January 1, 2010 and, if appropriate, to seek either legislative or rulemaking amendments to address issues raised by affected parties, particularly with an aim to shortening the 3 year investigatory period.
For more information on the Employee Classification Act and the IDOL rule contact Jay Shattuck at 217-544-6590.
U.S. Supreme Court Rejects State Law Requiring “Neutrality” Towards Union Organizing
For several years, the Employment Law Council has vigorously opposed legislative efforts that have prevented state contractors from exercising their constitutional right to fight an effort to be organized by a union. A similar law in California was recently struck down by the U.S. Supreme Court. The Council’s Employment Law & Litigation Committee Chairman, Jeff Risch of Wessels, Pautsch & Sherman has prepared the following brief article on his thoughts about the decision. Click here for the article.
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