Madison, WI - Like many small businesses, REALTORS® are having a
difficult time finding affordable health insurance
these days. However, REALTORS® are experiencing these
problems more acutely than most because, as
independent contractors, they don't have access to
traditional employer-provided health care and
insurance benefits. In response, the WRA has made the
cost and availability of health care and insurance a
top priority for this legislative session.
While health care is a national issue requiring
congressional attention, changes in state law are also
needed. One of the more direct ways to provide
immediate help for small businesses in general, and
REALTORS® specifically, is to conform Wisconsin tax
law with federal law as it relates to the
establishment of health savings accounts (HSAs).
Existing federal law provides tax sheltering for the
payment of "qualified medical expenses" for federal
income tax purposes. This same concept could and
should be adopted for state income tax purposes,
allowing for a 100-percent-income tax deduction on the
payment of health insurance premiums.
The benefits of such a proposal are substantial.
HSAs provide employees, or independent contractors,
the power to control their own money and work
autonomously with physicians without interference from
HMOs and insurance companies. The accounts follow the
individual and not the "employer," meaning that an
employee's account isn't cancelled or otherwise
negatively affected if he or she changes jobs. Funds
in HSAs grow tax-deferred, and all medical costs are
tax and penalty free. Moreover, unused funds in the
account can be carried forward into subsequent years.
HSA legislation in Wisconsin was passed last
session but vetoed by Governor Doyle, who asserted it
would decrease employer-sponsored insurance coverage
and benefit only wealthy people. For similar reasons,
most Democrats as well as the state AFL-CIO union
opposed the legislation.
In early January, it became clear that legislative
Republicans -
who control both houses of the Legislature by even
larger margins than last session - were not giving up
on the idea. Assembly Speaker John Gard signaled he
was prepared to send the legislation back to Governor
Doyle in the first weeks of session. Senate Majority
Leader Dale Schultz echoed Gard's support but
counseled for a more deliberative process. The
legislation has already passed two legislative
committees and will likely be before the full
legislature in a few weeks. Regardless of the timing
or the process, it's clear that Governor Doyle will
get another chance to sign this bill into law.
The legislative battle lines are already drawn. The
new Senate Minority Leader Judy Robson, echoing the
opposition of the unions, has denounced the renewed
GOP efforts saying that, "HSAs give employers an
invitation to discontinue their health insurance
plans. Instead of encouraging employers to drop
coverage, we should be making it more affordable for
them to continue coverage."
Evidently, the unions, Robson and other opponents
are unfamiliar with how independent contractors work
and the plight of REALTORS®, who are not "employees"
and who are attempting to cope on their own with
dramatically escalating health care costs. Current law
unfairly penalizes such workers, and thus, should be
changed. This isn't about class warfare. Rather, it's
about basic fairness.
Legislative leaders have indicated they intend to
advance numerous health care- and insurance-related
bills this session. In addition to HSAs, other ideas
include ending state income taxation of health
insurance premiums and expanding health care
purchasing cooperatives. The WRA will actively support
all legislation that provides new options for
affordable and available health care coverage for
independent contractors.
The WRA considers HSA legislation a priority for
this session, not just for REALTOR® members, but also
for independent contractors and other small businesses
that desperately need help meeting today's
extraordinary health care costs. Watch your e-mail for
coming Calls to Action on this important legislation.
For more details on this plan, contact Michael Theo at
mtheo@wra.org.
Published: 2/3/2005
