Governor Spitzer Calls For “Partnership for Coverage” Health Policy.  What Does That Mean for Employers and the Health Insurance Industry?

 Governor Spitzer has the daunting task of formulating a health care policy that meets the demands of the public and the interests of the private sector.  The lofty goal set by Governor Spitzer is universal coverage for all.  How to achieve this end will be left up to one of the two different means: a tax-supported single-payer system or restructuring the private health insurance market.  Governor Spitzer’s three part “Partnership for Coverage” calls for enrolling 1.3 million uninsured residents who are eligible but unregistered for the state insurance programs, expanding the state’s Child Health Plus Program to 70,000 middle income children and providing coverage for 1.3 million uninsured residents who are not currently eligible for the public programs.  The universal health care for New York would be funded through taxes or by employers and individuals picking up part of the cost.  Either way, the taxpaying citizens of New York will have to pick up the tab for this program.

Governor Spitzer Calls for Licenses to be Issued to Illegal Immigrants in New York: Does That Leave New York Vulnerable?

Governor Spitzer issued a new policy (effective in December) permitting illegal immigrants to obtain drivers’ licenses.  Governor Spitzer accomplished this by reversing an executive order issued by former Governor George Pataki in 2002 that required all applicants for a New York drivers’ license to have a valid Social Security number.  Many critics feel that the drastic move by Governor Spitzer was absurd given  9/11 and that his policy will render New York essentially a gateway and hiding place for terrorists.  What was the motivation behind this shift in policy?  Governor Spitzer cites road safety and an increased number of insured drivers which will result in a drop in insurance premiums.  Officials are concerned with border safety, conflict with federal policies and the lack of research on the impact of Governor Spitzer’s decision.  Legislators and officials around the state are opposing the Governor's new policy.

 Western New York Area Home Construction Holding Steady Means Good News For Home Insurers 

Nationwide, the number of single family home building permits has declined by 28% during this past year.   In New York State, the number of permits issued has declined by 14%.  In Buffalo Niagara, the decline was only 3% and, bucking the trend, Erie County registered an increase in the issuance of permits.  As such, the market in Western New York remains relatively stable and that means good news for home insurers and mortgage lenders.

State Wants Property Insurers to Build Rainy Day Funds 

State regulators unveiled proposed rules that would require insurance companies operating in New York to create catastrophe reserve funds to cover losses related to hurricanes, wind, hail, earthquakes, snow, ice, freezing rain or tsunamis.  The logic behind creating such funds is to ensure that the companies have enough money set aside to cover heavy losses, without being forced to raise premiums to offset the hit to their earnings.  Currently, tax laws discourage insurers from establishing such a fund.  The new regulations would require insurance companies to dedicate the amount they currently charge customers for catastrophe protection, less taxes paid, as such a reserve.  The amount of each company's reserve would be publicly disclosed.

Home Office Tax Deductions Hinge On Good Record Keeping

The number of U.S. taxpayers claiming home office deductions has grown from more than 1.5 million in 1991 to nearly 3.2 million in 2005.  The dollar amount claimed by Americans for home office deductions approaches 9 billion.  The IRS has a three pronged test for determining if a taxpayer is eligible for home office deductions.  Firstly, the home office must be used regularly.  Secondly, the home office must be used only for work.  Thirdly, a commuter can only claim a home office if the space is used for the convenience of the employer, not the employee. 

Prepared by Carla J. Miller Montroy