Legislative Update

Dylan LightfootStaff

February 12, 2013

Two weeks into the 2013 legislative session, the N.C. General Assembly is moving quickly to push through legislation reforming the state’s unemployment insurance system, and pass a bill nullifying provisions of the federal Affordable Care Act, also known as Obamacare.

House Bill 4/Senate Bill 6: ‘Unemployment insurance solvency & program changes’

“An act to address the unemployment insurance debt and to focus North Carolina’s unemployment insurance program on putting claimants back to work.”

  • Passed the House Feb. 5
  • Passed Senate today
  • Cuts maximum weekly benefits 35 percent
  • Reduces maximum period of coverage
  • Increases employer contributions
  • Cuts off federal Emergency Unemployment Compensation (EUC)

The bill passed the House 77 to 42, with Rep. Jonathon Jordan (R-Ashe, Watauga) voting for the bill.

The bill passed the Senate 36 to 13 with Sen. Dan Soucek (R-District 45) voting for the bill.

Aimed at paying down N.C.’s 2.4 billion jobless benefits debt to the federal government, the bill would permanently cut maximum weekly unemployment benefits from $535 to $350.

The 26-week maximum coverage period would be replaced with six- to 20-week sliding-scale maximum based on the seasonally adjusted unemployment rate.

The bill would temporarily increase employer State Unemployment Tax Assessment (SUTA) rates, and impose a 20 percent surcharge.

With an effective date July 1, benefit reductions in the bill would violate the federal “non-reduction rule,” cutting off as many as 45 weeks of extended EUC benefits for 80,000 unemployed N.C. workers.

North Carolina’s December unemployment rate was 9.5 percent, with 444,851 of the labor force out of work, according to the N.C. Department of Commerce. Nationwide, the number of unemployed persons per job opening was 3.3 as of November, according to the Bureau of Labor Statistics.

Senate Bill 4/House Bill 16: ‘No N.C. exchange/No Medicaid expansion’

“An act (1) to clarify the state’s intent not to operate a state-run ‘partnership’ health benefit exchange, (2) to provide that future Medicaid eligibility determinations will be made by the state rather than the federally facilitated exchange, and (3) to reject the Affordable Care Act’s optional Medicaid expansion.”

  • Passed the Senate Feb. 5
  • House votes tomorrow
  • Rejects Affordable Care Act (ACA) exchanges
  • Returns $74 million federal grant
  • Blocks ACA Medicaid expansion

The bill passed the Senate 32 to 17, with Sen. Dan Soucek (R-District 45) voting for the bill.

A refusal to participate in state-federal health insurance exchanges, the bill reads: “No department, agency, or institution of this State shall enter into any contracts or commit any resources for the provision of any services related to the federally facilitated Health Benefit Exchange under a “Partnership” Exchange model…”

The bill instructs the Department of Health and the Department of Insurance to “cease all expenditures funded by” a $73.9 million federal grant applied for under the Perdue administration, and awarded to the state in January to fund establishment of a N.C.-federal government partnership exchange.

The bill would not expand Medicaid eligibility to include adults with incomes up to 133 percent of the federal poverty guideline as provided under the ACA.

In 2012, the state had a $500 million Medicaid deficit. While the ACA provides initial federal subsidy of increased Medicaid costs, expanding eligibility could mean greater Medicaid budget shortfalls in years to come.

According to the State Health Access Data Assistance Center, 812,000 North Carolinians at or below 138 percent of the federal poverty guideline were uninsured in 2012.

Gov. Pat McCrory announced his support of the bill in a statement issued this morning saying, “The results of our findings make it abundantly clear that North Carolina is not ready to expand the Medicaid system and that we should utilize a federal exchange.”

The House is scheduled to vote on the bill tomorrow.

The bill reads: “This act is effective when it becomes law.”