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'Grand Bargain' Reached on Paid Leave, Minimum Wage, Sales Tax

Posted by John Regan on Jun 20, 2018 11:18:45 AM

The Massachusetts Legislature will today consider a sweeping compromise between the business community and progressive groups on the issues of paid family and medical leave, minimum wage and a reduction of the state sales tax. 

StateHouse-resized-600The so-called “grand bargain” follows months of negotiations among employers, labor unions, community groups and legislators seeking to eliminate three potential November ballot questions – one asking voters to approve paid leave, a second to raise the minimum wage to $15 per hour and a third to reduce the sales tax from 6.25 percent to 5 percent.

Debate on the compromise comes two days after the Massachusetts Supreme Judicial Court disallowed a proposed constitutional amendment that would have imposed a surtax on incomes of more than $1 million and earmarked the money for transportation and education.

“AIM has worked diligently under difficult circumstances to get the best deal possible for Massachusetts employers on all three issues,” said Richard C. Lord, President and Chief Executive Officer of AIM.  “We commend the representatives of the Raise Up Coalition, other business groups, and the members of the General Court for working long and hard to reach an agreement.”

“While everyone gives something during a negotiation, we are satisfied and believe that our member employers are better off with a legislative compromise than with voter approval of the language of the ballot questions as drafted.” 

The compromise will phase in mandated paid family and medical leave over three years for all Massachusetts employers. AIM and other business groups negotiated reductions in the duration of family leave from 16 weeks in the proposed ballot question to 12 weeks, and of personal medical leave from 26 weeks to 20 weeks.

The cost of the program may be split between employers and workers, though the sharing arrangements are different based upon the type of leave and the size of a company.

More importantly, the compromise includes an opt-out provision for employers with programs that offer benefits greater than or equal to what an employee would receive in the state program.

Workers on paid leave will earn 80 percent of their wages up to 50 percent of the state average weekly wage, then 50 percent of wages above that amount, up to an $850 cap.

The compromise envisions that the Retailers Association of Massachusetts will drop its proposed ballot question on reducing the sales tax. In return, the compromise will phase out the requirement that retail workers earn time-and-a half for working on Sundays; create a permanent, two-day sales tax holiday; and will not include an automatic indexing provision of the minimum wage, currently $11 per hour and increasing to $15 per hour over five years.

The negotiations were carried out against the backdrop of polls indicating overwhelming support for all three ballot questions, not surprising given that the proposals appeared to offer something for nothing. Recent polls put support for the paid family and medical leave question at 82 percent and support for a $15 minimum wage at 78 percent.

Experts believe that a campaign to defeat questions with those sorts of poll numbers could cost $10 million per initiative. The ballot process is one-sided, winner-take-all. Coming to a legislative compromise avoids that by allowing a broader group of people to have input into key decisions to create policies that work for everyone.

AIM’s objectives for the negotiations were clear:

  • Encourage a legislative compromise that is balanced and fair, and that protects a strong Massachusetts economy.
  • Create programs that are accountable, have strong controls, and allow employers the flexibility to offer benefits that will attract and retain their employees.

Topics: Minimum Wage, Mandated Paid Leave, tax

Court Disallows Millionaire's Tax

Posted by Christopher Geehern on Jun 18, 2018 10:04:01 AM

The Massachusetts Supreme Judicial Court today disallowed a proposed constitutional amendment that would have imposed a surtax on incomes of more than $1 million and earmarked the money for transportation and education.

ScalesofJusticeVerySmallThe court, ruling in a case brought by AIM President Rick Lord and four other business leaders, decided that the initiative violated the state constitution by posing two unrelated questions to voters – whether they favored the surtax and whether they favored the required appropriation to transportation and education - in the same referendum.

The amendment would have imposed a new graduated income tax of 9.1 percent on all incomes more than $1 million. AIM believed the amendment would have had a devastating effect on the Massachusetts economy by increasing taxes for some 17,000 “pass-through” businesses that pay income tax at the individual rate.

“We are gratified that the Supreme Judicial Court agreed with the business community that the proposed question improperly combined a graduated income tax that has been rejected multiple times with spending requirements meant to appeal to voters,” Lord said.

“The lawsuit was not about public policy, but about preserving the integrity of the initiative petition process. The court did just that.”

The five plaintiffs lead organizations that represent the full breadth of the Massachusetts economy and are united in their commitment to ensuring that the commonwealth continues to foster conditions that support job development and economic growth. They are: Christopher Anderson, President of the Massachusetts High Technology Council, Inc. (MHTC); Christopher Carlozzi, Massachusetts State Director of the National Federation of Independent Business (NFIB); Mr. Lord; Eileen McAnneny, President of the Massachusetts Taxpayers Foundation (MTF); and, Daniel O’Connell, President and Chief Executive Officer of the Massachusetts Competitive Partnership (MACP). 

The named defendants in the lawsuit were Attorney General Maura Healey and Secretary of State William Galvin. 

The Supreme Judicial Court heard oral arguments in the case on February 5.

"We conclude that the initiative petition should not have been certified by the Attorney General as 'in proper form for
submission to the people,' because, contrary to the certification, the petition does not contain only subjects
'which are related or which are mutually dependent,' pursuant to art. 48, The Initiative, II, § 3, of the Amendments to the Massachusetts Constitution, as amended by art. 74 of the Amendments," the court wrote.

"The matter is remanded to the county court, where a judgment shall enter declaring that the Attorney General's certification of Initiative Petition 15-17 is not in compliance with the related subjects requirement of art. 48 and
the petition is not suitable to be placed on the ballot in the 2018 Statewide election."

The court found no common purpose in the taxation and spending elements of the proposed amendment.

"...(W)e are unable to discern a common purpose or unified public policy that the voters fairly could vote up or down as a whole. The two subjects of the earmarked funding themselves are not related beyond the broadest conceptual level of public good. In addition, they are entirely separate from the subject of a stepped rather than a flat-rate
income tax, which, by itself, has been the subject of five prior initiative petitions. Because a reasonable voter could not fairly accept or reject the petition as a unified statement of public policy, Initiative Petition 15-17 does not meet the relatedness requirement..."

The court decision may expedite ongoing negotiations among the business community and progressive groups to compromise on three other potential fall ballot questions – one establishing paid family and medical leave, a second increasing the minimum wage to $15 per hour and a third reducing the state sales tax. The chances of achieving a so-called “grand bargain” under which the Legislature would pass consensus bills on the three issues are significantly greater with the graduated tax now off the ballot.

Lord said the tax initiative was dangerous because it would have enshrined tax rates in the state constitution.

“Amending the constitution to achieve taxing and spending by popular vote is just a terrible idea, and could undo much of the good work that Massachusetts has done in terms of creating a successful economic climate,” he said. 

Massachusetts voters have previously rejected five proposals to change the Constitution to allow for a graduated state income tax: in 1962, 1968, 1972, 1976, and 1994.

Topics: Richard Lord, Massachusetts Supreme Judicial Court, Income Surtax

Why We're Negotiating over Ballot Questions

Posted by Rick Lord on Jun 12, 2018 3:21:21 PM

Associated Industries of Massachusetts has been negotiating for more than six months to reach reasonable compromises on three potential ballot questions that collectively could wreak havoc on the Massachusetts economy.

Lord.SpeakingI write today to report on where we stand in those negotiations and how the outcome may affect your company and the 4,000 other employers who make up the largest employer association in the commonwealth.

The proposed ballot questions put forward by a coalition of unions and progressive groups would ask voters in November to:

  • mandate paid family and medical leave for Massachusetts employees;
  • increase the state minimum wage to $15 per hour; and
  • reduce the sales tax from 6.25 percent to 5 percent.

A fourth question, a constitutional amendment that would impose a 4 percentage-point surtax on incomes of more than $1 million, has been challenged by myself and four other prominent business leaders in the courts. The Massachusetts Department of Revenue estimates that 80 percent of the returns that would be affected by the surtax include some amount of business income.

We engaged in these negotiations for several important reasons.

First, the AIM Board of Directors and the larger membership of the association believed it was in the best interests of employers to pursue a negotiated settlement that might moderate the radical nature of the three initiatives.

Second, House Speaker Robert DeLeo and Senate President Harriett Chandler asked AIM, other business groups and sponsors of the three initiatives in early April to expand the discussions and work toward a “grand bargain” that would allow the Legislature to resolve all the issues before they reached the ballot. AIM agrees with the legislative leaders that initiative petitions represent an inefficient method of addressing public policy decisions that should be left to elected lawmakers.

There is, finally, the sobering reality that the questions enjoy overwhelming support in early voter polls, not surprising given proposals that appear to offer something for nothing. Recent polls put support for the paid family and medical leave question at 82 percent and support for a $15 minimum wage at 78 percent.

Experts believe that a campaign to defeat questions with those sorts of poll numbers could cost $10 million per initiative. The ballot process is one-sided, winner-take-all. Coming to a legislative compromise avoids that by allowing a broader group of people to have input into key decisions to create policies that work for everyone.

Our objectives for the negotiations have been clear:

  • Encourage a legislative compromise that is balanced and fair, and that protects a strong Massachusetts economy.
  • Adopt a compromise that protects jobs by keeping Massachusetts a competitive place to do business for employers.
  • Create programs that are accountable, have strong controls, and allow employers the flexibility to offer benefits that will attract and retain their employees.

Any compromise on the three issues will have to be wrapped up before ballots go to print in early July. And to make matters even more confusing, conclusion of a “grand bargain” is inextricably tied to an imminent decision by the Massachusetts Supreme Judicial Court on the graduated income tax proposal.

AIM has said virtually nothing publicly about the ongoing negotiations because participants agreed at the outset to maintain the confidentiality of the discussions. The idea was that it would be harder to reach common ground if everyone litigated the issues in the news media. We have honored our confidentiality promise, and, even now, cannot disclose all the details of the negotiations until a deal is in place.

Here is what we can tell you.

Negotiations on the paid family and medical leave question began in November and significant progress has been made toward compromise. The talks have been intense but respectful on a complex and multi-faceted proposal that could add more than $1 billion in benefit costs to employers and workers if passed in November.

Challenging issues remain and anyone involved in negotiations knows that the final compromises are always the most difficult. But it’s fair to say that we are confident about reaching an agreement on a paid leave plan that will be far less economically punitive than the one set out in the ballot question.

That question would allow covered workers to take up to 16 weeks of family leave or 26 weeks of medical leave. Workers could take family leave to care for a child after the child’s birth, adoption, or placement in foster care; to care for a seriously ill family member; or to address needs arising from a family member’s active duty military service.

The prospects for agreement on minimum wage and the sale-tax decrease are more uncertain.

Raise Up Massachusetts, the coalition behind the minimum wage, paid leave and the income surtax, sent a letter last week to DeLeo and Chandler indicating that the talks had reached a “standstill” over proposals from the Retailers Association of Massachusetts to eliminate time-and-a-half for Sunday retail work and creation of a minimum wage for teen-aged workers.

Progressive groups have since stepped up their public campaign with a massive lobbying effort on Beacon Hill and a separate protest for the $15 per hour minimum wage that tied up traffic for hours on Monday in Boston’s financial district.

Jon Hurst, President of the retailer’s organization that is sponsoring the proposal to reduce the sales tax, said last week that business groups remain committed to finding a solution on all issues.

“Although our ballot proposal has the support of almost 70 percent of voters in a recent public poll, we remain committed to working with legislators, other employer organizations, and other negotiators to see if a legislative solution can be reached,” Hurst said.

AIM members need to understand that we will be satisfied but far from happy if we reach a grand bargain. None of the potential agreements on paid leave, minimum wage or sales tax will be the ones employers would have designed. We may be able to improve some potentially catastrophic ballot initiatives, but employers will still ultimately face the unsavory trifecta of mandated paid leave, an accelerating minimum wage and possibly an income tax surcharge.

The long-term lesson may be a fundamental change in the way employers approach ballot questions. Stay tuned.

Please contact John Regan, Executive Vice President, Government Affairs, at jregan@aimnet.org for updates on these issues.

Topics: Minimum Wage, Massachusetts Legislature, Mandated Paid Leave

Renewable-Energy Mandate Endangers Hydro Deal

Posted by Bob Rio on Jun 8, 2018 8:23:48 AM

Proposed legislation to increase the amount of renewable energy that electricity suppliers must purchase may jeopardize a recently announced project to bring more than 1,000 megawatts of clean electricity to Massachusetts from Hydro-Quebec.

HydroMore significantly, it would remove hydro power as a long-term potential source of clean energy for Massachusetts.

The recently announced hydro project, to be developed by the power company Avangrid, will begin moving hydro power to the commonwealth over a transmission line through western Maine by 2022. The development would curb greenhouse- gas emissions by substituting hydro power for electricity from fossil-fuel plants.

The Avangrid proposal has been championed by the Baker Administration and supported by AIM.

Final contracts are expected to be signed within the next several days. The project will then be filed with the Massachusetts Department of Public Utilities (DPU) to determine whether it is cost-effective for ratepayers.

But An Act to Increase Renewable Energy and Reduce High-cost Peak Hours (H.1747) and similar bills now being debated on Beacon Hill threaten approval of the Avangrid project because they focus only on renewable energy and penalize clean-energy sources like hydro power.

H.1747 was reported favorably by the House Committee on Telecommunication, Utilities and Energy Committee (TUE) last week.

H.1747 increases what is known as the renewable portfolio standard (RPS) – the amount renewable energy (primarily wind and solar) that electricity suppliers need to purchase to serve their electric load. The RPS for 2018 is 13 percent of a suppliers’ total electric load, increasing 1 percent per year.

H.1747 would increase that rate marginally for the next few years, then to 2 percent per year beginning in 2020 until it reaches 100 percent. Other proposals would increase it even faster.

Renewable Portfolio Standard Fact Sheet

Here’s the problem. Hydro power is not eligible for inclusion in the RPS under Massachusetts law. As the RPS mandate increases (along with other energy mandates) hydro power will at some point become ineligible to be sold in Massachusetts. Based upon AIM’s analysis of the small increases proposed in H.1747, hydro power could be out of the energy mix before the end of the proposed 20-year Avangrid contract term and well before the RPS approaches 100 percent.    

The result is that Massachusetts business and residential consumers will end up paying for hydro power they can’t use.  That conundrum could significantly impact the cost-effectiveness determination of the proposed hydro power contract.   

The bottom line is that any bill that raises the RPS will eliminate the possibility of the legislature adding more hydro power to our energy supply. That’s a shame because the amount of power Massachusetts needs to meet its clean-energy goals is immense. Shutting out hydro will add decades to the time frame needed to achieve those goals.

Why does H.1747 and similar legislation put all our energy needs in one basket - essentially offshore wind – when at least part of the solution is already built?

We cannot believe that it is the goal of the Legislature to close the door on any long-term, cost-effective contracts for hydro power beyond the current procurement while disrupting the current procurement from reaching its full potential. That is the net effect of raising the RPS.

We urge the House Ways and Means Committee to turn thumbs-down on this bill. It will not help us achieve our carbon goals.

Letter Opposing An Act to Increase Renewable Energy

Connect with Bob Rio on Twitter, @robertrioaim, or at rrio@aimnet.org

Topics: Electricity, Environment, Energy

Employer Confidence Surges during May

Posted by Christopher Geehern on Jun 5, 2018 9:28:26 AM

Business confidence surged during May to its highest level since the summer of 2000, driven by improving employer outlooks about the state and national economies.

BCI.May.2018The Associated Industries of Massachusetts Business Confidence Index (BCI) rose 2.4 points to 66.6 last month after increasing modestly during April. The BCI has risen in five of the last six months and now stands 5.8 points higher than its level of a year ago.

Confidence remains well within the optimistic range. The only whiff of concern came in the index that measures hiring, which dropped 1.5 points for the month and 0.2 points during the year.

Economists believe the weakness in the AIM Employment Index reflects the persistent shortage of workers in Massachusetts that has forced some employers to postpone expansions or to decline new business opportunities.

Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design, cautioned that major month-to-month movements in the Index like those in May sometimes reflect statistical or sampling anomalies. He noted, however, that the numbers are consistent with a general sense that the US and state economies are picking up steam in the second quarter after a slow start to 2018.

“There are signs GDP growth gathered momentum early in the second quarter, with solid consumer spending, business investment on equipment and industrial production,” Torto said.

The nation’s economy grew at a 2.2 percent rate during the first quarter. Hiring across the US remains strong, with the government reporting on Friday that employers added 223,000 jobs during May.

“And the Massachusetts economy continues to operate at virtually full capacity, creating significant constraints on the availability of labor,” said Torto.

The AIM Index, based on a survey of Massachusetts employers, has appeared monthly since July 1991. It is calculated on a 100-point scale, with 50 as neutral; a reading above 50 is positive, while below 50 is negative. The Index reached its historic high of 68.5 on two occasions in 1997-98, and its all-time low of 33.3 in February 2009.

The Index has remained above 50 since October 2013.

Constituent Indicators

The constituent indicators that make up the overall Business Confidence Index were largely higher in May.
The Massachusetts Index assessing business conditions within the commonwealth surged 5.9 points to 70.0, leaving it 7.9 points higher than in May 2017.

The U.S. Index ended the month at 69.3, up 5.4 points for the month and 14.4 points for the year.
May marked the 99th consecutive month in which employers have been more optimistic about the Massachusetts economy than the national economy.

The Current Index, which assesses overall business conditions at the time of the survey, gained 1.5 points to 66.6. The Future Index, measuring expectations for six months out, increased 3.3 points to the same 66.6 level. The Current Index has risen 6.2 points and the Future Index 5.3 points since May 2017.

Employer views of their own companies were mixed.

The Company Index increased slightly to 64.5, up 2.1 points for 12 months. The Employment Index ended the month at 58.3, a 1.5-point decrease for the month and 0.2 points lower than a year ago. The Sales Index rose 1.7 points for the month and 3.3 points for the year.

Manufacturing companies (66.8) and non-manufacturers (66.3) were equally optimistic about the economy. Companies in the eastern part of Massachusetts (67.9) were more bullish than those in the west (64.6).

“Massachusetts employers remain confident, but economic growth in the commonwealth is increasingly bumping up against the structural shortage of skilled workers,” said Alan Clayton-Matthews, a BEA member and professor in the School of Public Policy & Urban Affairs, Northeastern University.

Clayton-Matthews told MassBenchmarks earlier this year: “Retiring baby boomers will continue to dampen labor force growth this year and throughout the next decade unless the commonwealth is able to attract young workers from across the country and the world.”

The BCI increase came as the Mass Insight index of consumer confidence in Massachusetts suffered its biggest quarterly decline in years, from 134 in February to 121 in May. The index remined in optimistic territory, but fell below a comparable index for national consumer confidence for the first time since 2014.

Mixed Signals

AIM President and CEO Richard C. Lord, also BEA member, said the increase in business confidence underscores the underlying strength of the economy at a time when employers are receiving mixed signals from government.

“On the one hand, employers are seeing benefits from federal tax reform. On the other hand, they are struggling to process the new Massachusetts health-care surcharge and looking ahead warily to the possibility that Massachusetts voters may approve a graduated income tax that could harm small businesses,” Lord said.

“AIM and the employer community are seeking to negotiate reasonable compromises on issues such as paid family/medical leave and a $15 per hour minimum wage, compromises that would allow employers to continue creating jobs for Massachusetts residents.”

Topics: Skills Gap, AIM Business Confidence Index, Massachusetts economy

Hold Your Applause on Supreme Court Arbitration Decision

Posted by Tom Jones on Jun 4, 2018 1:04:23 PM

supremecourt.smallThe decision by the United States Supreme Court last week upholding the use of arbitration agreements to prohibit class-action lawsuits generated widespread cheering in the business community.

But employers would be well advised to hold their applause. 

That’s because this Supreme Court decision is unusual in that it does not draw a bright line making it clear what employers may or may not do. It simply opens the door for employers to pursue mandatory arbitration as an option.

Most importantly, the decision does not allow employers to use arbitration agreements to escape the “onerous” aspects of legally established remedies.

The court has made clear that while arbitration involves a change of forum from the courts to the private arbitration arena, and an elimination of class actions, it does not change workers’ substantive rights. Arbitrators must apply the same law that a court would apply and award the same substantive remedies for proven violations.

Employees will still be able to file a claim for nonpayment of wages, sexual harassment, or other adverse consequence at work.  They just won’t be able to do it as a class action.

The best advice to employers any time they face a new legally justified option - take time to weigh the options before moving ahead.  

The Supreme Court ruled that companies may use arbitration clauses in employment contracts to prohibit workers from banding together to take legal action over workplace issues. The vote was 5 to 4, with the court’s more conservative justices in the majority. The court's decision could affect some 25 million employment contracts.

Writing for the majority, Justice Neil M. Gorsuch said the court’s conclusion was dictated by a federal law favoring arbitration and the court’s precedents. If workers were allowed to band together to press their claims, he wrote, “the virtues Congress originally saw in arbitration, its speed and simplicity and inexpensiveness, would be shorn away and arbitration would wind up looking like the litigation it was meant to displace.”

The ruling does not necessarily invalidate Massachusetts law on the topic of arbitration.

For example, a Massachusetts case from a few years ago centered around an arbitration waiver agreement that prohibited plaintiffs' recovery of multiple damages in any arbitration proceeding - a provision that directly conflicted with the Massachusetts mandatory treble damages law.

In 2013 the Massachusetts Supreme Judicial Court (SJC) declared the waiver of multiple damages in the arbitration agreement unenforceable, ruling that the FAA (Federal Arbitration Act) did not preempt the SJC from holding that waiver of multiple damages in these circumstances is void as contrary to Massachusetts public policy.

Given that arbitration is really a procedural strategy, there are many questions you should consider before adopting a change in your company’s practices. Some questions to ask yourself as a company include:

  • How will arbitration be a benefit to us?
  • How much will it cost to use it?
  • What is the potential cost vis-a-vis the likely benefit?
  • Will we be better off as an employer with such a policy in place?
  • If so, how?
  • How often do we get sued?
  • What issues do we get sued for? Wages? Discrimination?
  • If or when we do get sued, what is our success record under the current rules?

Consider that in discrimination cases filed at the Massachusetts Commission Against Discrimination (MCAD), the agency found “Lack of Probable Cause” (i.e. the case was dismissed) in 87 percent of the cases filed, according to its most recent annual report. Are you likely to do any better with an arbitrator?

One other thing to keep in mind is that federal and state administrative agencies, such as the Equal Employment Opportunity Commission (EEOC) or MCAD, are not bound by private arbitration agreements; they are able to sue over statutory rights where private claimants may not bring a case.

Before jumping on the bandwagon of arbitration, you need to engage in due diligence to see if it makes sense for your company.

Topics: Employment Law, U.S. Supreme Court

Video Blog | Lt. Governor Karyn Polito Discusses Economic Growth

Posted by Christopher Geehern on May 31, 2018 9:28:46 AM

Lt. Governor Karyn Polito, dubbed the “road warrior” because of a travel schedule that has taken her to every city and town in Massachusetts, told AIM members recently that the measure of economic growth is the degree to which prosperity is shared throughout the commonwealth.

The lieutenant governor spoke to more than 850 business leaders gathered for the AIM Annual Meeting.

Here is her entire speech:

Topics: AIM Annual Meeting, Massachusetts economy, Lt. Governor Karyn Polito

Employers Announce Initiative to Reduce Health Costs

Posted by Katie Holahan on May 30, 2018 11:30:32 AM

AIM and 19 other prominent Massachusetts business organizations today announced an initiative to save $100 million in health care costs by reducing avoidable use of hospital emergency departments (EDs).

Health.EnergyThe newly formed Massachusetts Employer-Led Coalition to Reduce Health Care Costs will work with doctors, hospitals, and health insurers to reduce inappropriate use of emergency departments by 20 percent in two years. State officials estimate that 40 percent of ED visits are avoidable, a pattern that costs $300-$350 million annually for commercially insured members alone.

Coalition leaders Richard C. Lord, President and CEO of the Associated Industries of Massachusetts (AIM), and Eileen McAnneny, President of the Massachusetts Taxpayers Foundation (MTF), say the group will help employers take a direct role in the health and health care of their employees and beneficiaries.

(Read the full statement of the Massachusetts Employer-Led Coalition to Reduce Health Care Costs here).

Health care industry organizations – including the Massachusetts Health and Hospital Association (MHA), Blue Cross Blue Shield of Massachusetts (BCBSMA), the Massachusetts Association of Health Plans (MAHP), and the Massachusetts College of Emergency Physicians (MACEP) – are committed to be strategic partners with the Coalition.

The Coalition’s goal is to shift as many avoidable ED visits as possible to high-value, lower-cost settings to relieve crowded EDs, reduce the cost of care, and improve quality. The vision is a health care system that delivers the right care, in the right place, at the right time.

“The rising cost of providing health insurance to employees remains one of the most troublesome issues facing the 4,000 employers who are members of Associated Industries of Massachusetts,” said Lord.

“AIM has always been active in the health care policy arena, advocating for changes to our delivery system that balance access to care and efficiency. Today, we are taking this collaborative step to ensure that employers and their workers can access the right care in the right place, maximizing both health care quality and affordability.”

McAnneny stated, “As an organization dedicated to the long-term economic and fiscal health of the commonwealth, the Foundation recognizes the need to address the costs of health care by taking unnecessary cost out of the system. I am proud to co-chair this newly formed coalition that will provide employers with the tools they need to educate their employees on getting appropriate care at the appropriate setting.”

McAnneny added, “Not only will this reduce health care costs and provide rate relief for small businesses and patients, it also allows us to optimize resources to ensure quality care for those in need of emergency care.”

Most ED use is necessary, appropriate, and in many cases life-saving. However, providers and payers broadly agree that shifting ED use for non-urgent health problems to more timely, appropriate settings will improve quality and patient experience, and lower the cost of care. Upper respiratory infections, skin rashes, allergies, and back pain are among the most common conditions for which Massachusetts patients seek care in the ED unnecessarily and the cost of an ED visit can be five times that of care provided in a primary care or urgent care setting.

“For several years the HPC has identified reducing avoidable ED use as a target area for health care improvement and has recommended coordinated action to address it,” said David Seltz, Executive Director of the Massachusetts Health Policy Commission. “This new coalition represents an exciting commitment by employers to work collaboratively to address one of the underlying drivers of health care costs. We are excited to be a strategic partner in this effort, consistent with the HPC’s goal of reducing health care cost growth without compromising quality or access.”

The strategic partners, MHA, BCBSMA, MAHP, and MACEP, will engage with the Coalition in a collaborative process to uncover solutions and support changes in the health care delivery system. Additionally, the Coalition intends to engage collaboratively with other important health care stakeholders, including health plans, hospitals, physicians, consumer advocates, labor unions, government agencies, and community organizations.

The Coalition will focus on four tactics for change:

  1. Educating Employees: Work with employers to communicate information about avoidable ED use with employees and families so they can get the best possible care in settings such as primary care practices, retail clinics, and urgent care centers.
  1. Learning from Data: Track and publicly report the rate of avoidable ED visits so employers, stakeholders, and the public may understand and tackle the scope of the issue.
  1. Collaborating Across the Health Care System: Work with labor unions, health care providers, health plans, employers, and employees to reward and encourage the appropriate use of the ED by aligning financial incentives, and bolster the availability of care in the community, especially during nights and weekends.
  1. Advocating for Policy Change: Advocate for policy changes that will advance new care delivery and payment models, such as Accountable Care Organizations (ACOs), telemedicine, and mobile integrated health, which combined, can improve access to timely care in the right setting.

More details on the Coalition’s framework to reduce avoidable ED use are included in the statement here.

The Coalition was built and organized throughout the beginning of 2018, and plans to kick off its public activities in September. The rest of the major initiatives are planned to begin in early 2019. If successful, this collaborative effort will provide a model for future coordinated efforts to tackle other drivers of health care costs.

“I urge employers of any size to participate in the Coalition’s initiatives,” added Lord. “These efforts are an opportunity to engage with each other by sharing our successes and difficulties in managing health care costs – while also actively educating our employees about their ability to drive down health care costs through patient choice. We want to raise the bar for all employers in Massachusetts.”

The Employer Members of the Coalition are:

Associated Industries of Massachusetts
Associated Subcontractors of Massachusetts
Boston Municipal Research Bureau
Greater Boston Chamber of Commerce
Massachusetts Bankers Association
Massachusetts Business Roundtable
Massachusetts Competitive Partnership
Massachusetts Food Association
Massachusetts High Technology Council
Massachusetts Package Stores Association
Massachusetts Restaurant Association
Massachusetts Society of CPAs
Massachusetts Taxpayers Foundation
NAIOP Massachusetts
National Federation of Independent Business
North Shore Chamber of Commerce
Retailers Association of Massachusetts
South Shore Chamber of Commerce
Springfield Regional Chamber of Commerce
Worcester Regional Chamber of Commerce 

The Strategic Partners are:

Blue Cross Blue Shield of Massachusetts
Massachusetts Association of Health Plans
Massachusetts College of Emergency Physicians
Massachusetts Health and Hospital Association
Massachusetts Health Policy Commission

Topics: Health Care Costs, Controlling Health Care Costs, Health Insurance

Offshore Wind Project Underscores Value of Competition

Posted by Bob Rio on May 23, 2018 5:40:55 PM

Associated Industries of Massachusetts today applauded the competitive process that led to the selection of Vineyard Wind to begin developing a wind farm off Martha’s Vineyard that will power the equivalent of 750,000 homes each year.

WindTurbinesOceanSmallThe selection of Vineyard Wind, a joint venture between of Avangrid Renewables and Copenhagen Infrastructure Partners, follows an intensive bidding process conducted under the 2016 Act to Promote Energy Diversity. AIM supported the competitive elements of that bill as a means to get the best deal possible for ratepayers as the commonwealth moves to renewable sources of electricity.

Vineyard Wind, an AIM member, will now begin negotiations to secure the necessary transmission services and power purchase agreements to facilitate the delivery of offshore wind electricity to Massachusetts customers. Once satisfactory contract terms are secured, those documents will be submitted to the Massachusetts Department of Public Utilities for formal review.

AIM expects to represent the interests of employers in that review.

No figures were released yesterday about what the power produced by the Vineyard Wind development will cost. 

“AIM supports competition as the best way to moderate energy costs in Massachusetts and that idea was clearly born out by the spirited race to build the nation’s first large-scale wind farm,” said Richard C. Lord, President and Chief Executive Officer.

The 2016 energy bill required the state’s electric distribution companies to procure 1,600 megawatts offshore wind energy within the next decade, resulting in intense competition among offshore wind lease holders for long-term contracts with utilities in Massachusetts.

Vineyard Wind says its project will “support hundreds of operations and maintenance jobs and create thousands of construction jobs.”

“Vineyard Wind is proud to be selected to lead the new Massachusetts offshore wind industry into the future,” said Lars Thaaning Pedersen, CEO of Vineyard Wind. “Today’s announcement reflects the strong commitment to clean energy by Governor Baker and the Massachusetts Legislature.”

Vineyard Wind expects to begin construction in 2019 and become operational by 2021. When completed, the will reduce Massachusetts’ carbon emissions by over 1.6 million tons per year, the equivalent of removing 325,000 cars from state roads.

The proposal also commits $10 million to a Wind Accelerator Fund to accelerate the development of an offshore wind supply chain, businesses, and infrastructure in the Bay State by attracting investments to upgrade or create necessary facilities and/or infrastructure.

It also creates a $2 million Windward Workforce program to recruit, mentor, and train residents of Massachusetts, particularly southeast Massachusetts, Cape Cod and the Islands, for careers in the commonwealth’s new offshore wind industry.

Separately, a second AIM member, Deepwater Wind, was selected yesterday to develop 400 megawatts of offshore wind to serve Rhode Island.

Topics: Environment, Energy, Offshore Wind

Lt. Governor Stresses Regional Approach to Economic Growth

Posted by Christopher Geehern on May 21, 2018 8:44:05 AM

Lt. Governor Karyn Polito, dubbed the “road warrior” because of a travel schedule that has taken her to every city and town in Massachusetts, told AIM members Friday that the measure of economic growth is the degree to which prosperity is shared throughout the commonwealth.

LG.PolitoPolito told more than 850 business leaders gathered for the AIM Annual Meeting that the Baker Administration has sought to meld state programs such as the Economic Development Incentive Program and Massworks with regional growth strategies that reflect the unique economic footprint of each region.

“What we have learned from this journey is to develop strong relationships that help to grow the economy throughout the state,” said Polito, a lifelong Shrewsbury resident who represented that town in the Legislature before becoming Lieutenant Governor in 2015.

She added later: “People don’t judge how things are going in life by how things are going at the State House, on Beacon Hill…They judge things by how things are going in the communities where they raise their kids.”

Polito keynoted a celebration of Massachusetts employers that also saw AIM present Vision Awards to the financial services company, MassMutual, and to philanthropists Bill and Joyce Cummings. The association also honored the Springfield Empowerment Zone Partnership with the 2018 John Gould Education and Work Force Development Award.

Polito recalled sitting in city and town halls throughout the commonwealth speaking to local officials about the best ways to stimulate the economies in those communities. The conversations dovetailed with an administration effort to persuade local governments to share best practices and become more efficient.

More than 850 of those best-practice projects are currently underway.

The lieutenant governor said that ensuring economic development takes place “from one end of this great state to another” was a priority for the administration from the start. She noted several examples, including investment in a life-sciences incubator in Pittsfield, development of a life-sciences manufacturing center in Worcester, the introduction of broadband Internet to 53 western Massachusetts communities that lacked it, and the use of $275 million in infrastructure investments to improve everything from downtown commercial streets to access roads opening up industrial parks.

“Each region has incredible assets…regional strategies are integral to growing the economy throughout the commonwealth,” she said.

Polito also stressed the importance of solving key economic issues such as the shortage of skilled workers, the shortage of affordable housing and the rising cost of energy.

She said efforts to address the tight supply of workers are concentrated on three areas – information technology, health care and manufacturing.

The objective is “to graduate students to you with the right skills.”

Polito thanked AIM for representing the interests of all types of employers.

“You give such strong voice to the businesses across our commonwealth, no matter how big or small and no matter where they are situated,” she said.

Topics: AIM Annual Meeting, Lt. Governor Karyn Polito, AIM Vision Award, Gould Education and Workforce Training

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