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Photo: Governor Pataki hands signature pen to Superintendent Serio at Sole Proprietor Health Insurance Bill signing

September 20, 2002


Makes Affordable Small Business Group Health Insurance Available to Sole Proprietors

Governor George E. Pataki today signed into law a bill that will make more affordable health insurance available to small businesses run across New York State that are owned and operated by single-person businesses.

The new law, which was signed by the Governor at the Business Council of the State of New York’s 2002 Annual Meeting, creates a new premium rate for sole proprietors that is significantly lower than the individual rates they were previously paying.

"From cutting taxes, to reducing workers’ compensation costs, to eliminating and reforming thousands of burdensome regulations, we’ve launched a comprehensive effort to keep New York’s small businesses as strong as possible -- but we’re committed to doing even more," Governor Pataki said. "This new law will help to ensure that thousands of small business owners across the State -- and their families -- will have access to the quality, affordable health care they need and deserve."

"We’ve worked hard to expand access to quality health care for all New Yorkers, and this new law will make affordable health insurance available to more than 250,000 people by giving sole proprietors access to the same coverage as other businesses," the Governor said. "At the same time, it will provide entrepreneurs and the smallest of businesses with another tool they need to succeed. Properly nurtured, these businesses have the potential to become great engines of economic growth and job creation."

The legislation approved by the Governor amends the insurance law and requires health insurers that offer group coverage through New York's chambers of commerce or association groups to provide the same policies to sole proprietors. Under the new law, the rate charged to sole proprietors must be within 20 percent of small group rates. Such rates will be much less expensive than the premiums for individuals now paid by many sole proprietors.

Senator James L. Seward, Chairman of the Senate Insurance Committee said, "This is about helping small business owners get health insurance -- and ultimately, health care -- for their families. The cost of health insurance is a huge financial burden for sole proprietors, like accountants, barbers or contractors, and the bill signed by Governor Pataki will make health insurance more available at a better rate. I applaud the Governor for signing the measure into law and for demonstrating once again his concern that New Yorkers have affordable health insurance."

Beth Coleman, President of the Greater Southern Dutchess Chamber of Commerce and Chair of the Chamber Alliance of New York State said, "New York’s chambers of commerce deeply appreciate the leadership of Governor Pataki and the commitment of the State Legislature in addressing this critical issue. Sole proprietors, New York’s smallest businesses, have for many years struggled to find affordable health insurance. This law will significantly ease that burden by enabling sole proprietors to find more affordable insurance through chambers and other business groups."

State Insurance Superintendent Gregory V. Serio said, "This is a great victory for New York’s small businesses. For some time many insurance carriers had not offered sole proprietors access to group health insurance -- forcing these entrepreneurs into the much more expensive individual market for their coverage. Now sole proprietors will be able to access the same quality health insurance as other small businesses. Growing up in the family of a sole proprietor, I am personally gratified to see this bill signed into law."

Since 1995, New York State has undertaken a comprehensive series of measures to ensure that the State’s more than 1.1 million small businesses remain strong and competitive. Specific initiatives include:

  • A nearly 25 percent reduction in the personal income tax rate, which is the primary tax for many small businesses;
  • Direct tax relief for small businesses has been provided through reductions in the S and C corporation tax rates, a reduction in the gross receipts tax (GRT) on telecommunications, and the elimination of the GRT on energy used by businesses;
  • The creation of a sales tax vendor allowance so that businesses can now offset the cost of collecting and remitting sales taxes; and a host of other sales tax reductions targeted to small businesses;
  • During the past eight years the State has cut the rate of new regulations by 50 percent, and eliminated or substantially reformed more than 2,000 regulations -- saving businesses more than $3 billion in unnecessary costs;
  • Sweeping reforms to the workers’ compensation system have been enacted -- reducing rates for businesses by nearly 40 percent;
  • The launch of the Healthy New York Initiative, which is designed to help thousands of small businesses meet the costs of providing health insurance to their employees;
  • The dramatic expansion in the 2002-03 State Budget of the highly successful Excelsior Linked Deposit Program -- which provides loans to small businesses that are well below current market interest rates. The program was increased this year from $200 million to $350 million-- an increase of 75 percent.

The success of New York’s comprehensive efforts to promote job creation and economic growth -- and to strengthen the competitiveness of businesses of all sizes -- has been affirmed by several recent independent reports:

  • Site Selection magazine ranks the State 3rd in the nation in attracting new and expanded corporate facilities, with 988 in 2001. This compares favorably to our disappointing 20th ranking back in 1994, when New York only had 75.
  • A report from the Progressive Policy Institute, the research arm of the Democratic Leadership Council, ranks the State's economy among the top 10 in the nation in transforming to the "New Economy" of the 21st century.
  • In April, JP Morgan stated that, for 2001, Upstate created new jobs faster than all other Great Lakes industrial states including Ohio, Michigan, Indiana, Illinois, Wisconsin and Minnesota. Ten years ago, Upstate was ranked dead last.
  • The U.S. Department of Commerce ranks the State's economy among the 10 best in the nation in the growth of "Gross State Product" – a comprehensive measure of a State’s economic strength.
  • New York State's regulatory reform efforts continue to draw national attention, as the prestigious Seattle-based Washington Roundtable issued a new report citing New York’s reforms as a model for other states to follow. Entitled "New York: A Model for Regulatory Reform in Washington State," the report lauds New York's successful reform efforts, specifically citing the success of the Governor's Office of Regulatory Reform (GORR) and the ground-breaking Executive Order No. 20, which set the framework for the State's reform efforts.
  • A report recently issued by Manpower Inc. indicates that 25 percent of surveyed companies across New York State plan to create new jobs during the 4th quarter of 2002. In spite of the fact that New York was at the epicenter of the September 11 terrorist attacks, the report showed that the 25 percent figure for New York-based companies slightly exceeded the 24 percent of surveyed companies nationwide that plan to create new jobs during the same time period. This also reflects an improvement for New York’s economy compared to last year, when 21 percent of surveyed companies responded that they would create new jobs during the 4th quarter of 2001.

Department of Financial Services


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